Merrill Lynch High Quality and Dividend Yield screener for dividend stocks, is a dividend portfolio the firm has run since 2004. The screen seeks to identify high-quality stocks with secure and above-market dividend yields that are aligned with the firm’s analysts’ fundamental outlook.
Merrill Lynch believes that the following screening factors are likely to identify 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
- 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.
Performance High Quality and Dividend Yield screener
Since inception, the High Quality and Dividend Yield Screener has outperformed the S&P 500 TR index by 4.8ppt per year.
See below the performance chart and related table.