March 30, 2018

Our Ultimate Stock-Pickers’ Top 10 Dividend-Yielding Stocks



As you may recall from our previous dividend-themed articles, when we screen for top dividend-paying stocks among the holdings of our Ultimate Stock-Pickers we try to hone in on the highest-quality names that are currently held with conviction by our top managers. We do this by taking an initial list of the dividend-paying stocks held in the portfolios of our Ultimate Stock-Pickers and then narrow it down by concentrating on firms that we believe have competitive advantages, which, in our view, should allow them to generate the excess returns they'll need to maintain their dividends longer term. We also look for firms where there is lower uncertainty on our analysts' part regarding their future cash flows. We accomplish this by screening for holdings that are widely held (by five or more of our top managers), are yielding more than the S&P 500, represent firms with wide or narrow economic moats, and have uncertainty ratings of either low or medium.


Once our filtering process is complete, we create two different tables--one that reflects the top 10 stocks with the highest dividend yields, and the another that represents the stocks that are the most widely held by our top managers while also paying dividends in excess of the S&P 500. In our view, finding stocks that are yielding more than the benchmark index and operate in more stable industries where there is less uncertainty surrounding their future cash flows should offer some downside protection for investors. With markets at or near all-time highs and interest rates still at lower-than-normal levels, many investors are left searching for yield wherever they can find it. We should note, though, that the dividend yield calculations in each of these two tables are based on regular dividends that have been declared during the past 12 months and do not include the impact of any special (or supplemental) dividends that may have been paid out (or declared) during that time.

  


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