This is a dividend-focused strategy loosely on the "Growth & Income Winners" screen outlined by Kevin Matras in his book, entitled Finding #1 Stocks. The approach starts out looking for solid growth parameters then drills down to the best dividend payers of the group. In Matras' version, however, the primary filter is the US-focused Zacks Rank (a proprietary metric analysing analyst forecasts for i) Agreement, ii) Magnitude, iii) Upside Potential, Surprise). However, we simplify this to just look for a positive change in analyst forecasts over the last quarter instead. Matras envisages the top 7 by dividend yield, but with no more than 2 in each sector - although it's hard to find 7 such stocks qualifying on the UK market.
Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies
by Kevin Matras
Kevin's backtesting found that his version of this strategy had an average annual compounded return of 20.6% (that's while taking on about 40% less risk than the S&P 500).
This screen is based on a UK dataset.
It uses the following criteria:
Results are sorted by:
And limited to the first 14 Results
Winning Growth & Income Graphical History Returns| Timeframe | Screen Returns | FTSE 100 | Outperformance |
|---|---|---|---|
| 1 week | 3.08% | 1.44% | 1.6% |
| 1 month | 10.46% | 6.08% | 4.4% |
| 3 months | 11.00% | 5.68% | 5.3% |
| 6 months | 36.73% | 19.31% | 17.4% |
| 1 year | 54.62% | 23.73% | 30.9% |
| Since inception | 68.17% | 25.3% | 42.9% |
| Annualised | 44.03% |
Risk| Maximum Drawdown | -9.93% |
| Average No. of Holdings | 12.7 |
| Diversification Level | Moderate |
Chart based on an equal weighted portfolio of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
| Ticker | Name | % EPS Upgrade FY2, last 3m | ROE % | P/E Rolling 1y | Gross Gearing % | Yield % | Beta | Mkt Cap £m | |
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