Tuesday, July 29, 2014

Large Cap Dividend MFI Stocks

As John Carney has been asking for a cut on large cap (about $1b+), dividend stocks (2.6% or higher yield) performance - I did a quick and dirty analysis.  This first table is for 2010 and forward and that is my best data on dividends.  Recall my starting point is a MFI screen of $100m or greater market cap (50 stocks each month):

Yield Rank Largest Smallest Total
2.6% and higher 34.0% 8.1% 22.5%
Under 2.6% 11.1% 8.3% 9.5%
Total 19.3% 8.3% 13.4%

That is pretty stunning.  We knew dividend stocks did better (22.5% versus 9.5%). But large cap dividend stocks did even better (34%).  Let us see how this looks going back to 2006:

Yield Rank Largest Smallest Total
2.6% and higher 30.5% 12.3% 21.6%
Under 2.6% 9.7% 4.4% 6.3%
Total 16.1% 5.9% 9.9%
Pretty interesting.  Of course you can never assume that what has happened in the past will happen in the future. But it might be worth at least a shot!  The differential seems to be much more than chance.

Here are current stocks on list meeting that criteria (as of last weekend):

Stock  Initial Price   52 week low   Mkt Cap 
CSCO              25.97              20.22     132,863
CA              29.53              27.84       12,964
COH              34.63              33.39         9,612
GME              45.68              33.10         5,230
BAH              21.00              16.61         3,212
BKE              42.80              41.45         2,070
PDLI                9.50                7.38         1,648
RGR              58.11              48.52         1,127
Guess you can see why I added CA and CSCO in May!

2 comments:

John Carney said...

Marsh,

Thanks for the quick reply. I very much appreciate the data going back to 2006 when dividends were not so popular. I understand that it is not your best data but Wow! That kind of performance makes you want to believe in MFI.

John Carney said...

Marsh,

Maybe this is to come later when you have more time.

As you know the number of 2.6% or greater dividend is limited and there may be only one new one each month.

My question is to see if the returns are hurt by including large cap dividend stocks between 1.8% to 2.5% as second choices.

I think you would find that returns are not hurt that much and having the additional selection would assure that you can find 20 to 30 stocks each year.