In its high quality and dividend yield screen, BofA/Merrill Lynch added BA and CMI.
Since inception, the High Quality and Dividend Yield screen has outperformed the S&P 500 Total Return index by 146ppt (4.8ppt per year). In February 2015, the High Quality & Dividend Yield screen outperformed the S&P 500 by 0.4ppt, with a total return of +6.2% versus +5.7% for the index. Current constituents of the screen offer an average dividend yield of 2.3% versus the S&P 500’s dividend yield of 1.9%.
In March 2015, two new stocks are added, no deletions:
- Boeing (BA): S&P Common Stock Rank changed from B+ to A-.
- Cummins (CMI): Dividend yield is now higher than that of the S&P 500.
Screening Criteria
The screening factors used to uncover higher-quality companies that offer a relatively secure dividend yield. The stocks are selected
from the S&P 500 and exclude financial stocks due to metric incomparability with other sectors.
- S&P Common Stock Rank of A+, A, or A-. The S&P Common Stock Rankings
are our main measure of quality. These rankings are based primarily on the
growth and stability of earnings and dividends over a 10-year period. - Return on equity (ROE) greater than that of the S&P 500 ROE.
- Debt/Equity lower than that of the S&P 500.
- Trailing 12-month dividend yield greater than that of the S&P 500.
- BofAML opinion indicates “Buy” or “Neutral” as well as the likelihood that the dividend will remain the same or be increased (i.e., a dividend rating of “7”).
- The ratio of the last 12-months’ free cash flow to dividends (FCF/Div) must be greater than 1.0.
Current high quality and dividend yield portfolio
- ADP
- Boeing
- C.H. Robinson
- Cummins
- DuPont
- Dover Corporation
- Johnson & Johnson
- Linear Technology
- 3M
- Norfolk Southern
- Procter & Gamble
- Paychex
- Qualcomm
- Raytheon
- United Technologies
- Wal-Mart
- Exxon Mobil
