Our stock screens expert Algy Hall has designed a series of stock screens for Alpha subscribers which will run on a weekly basis, offering readers a steady stream of investment ideas.
Each strategy will be updated every four weeks, and will be run across three markets: the FTSE All Share, FTSE All Small, and the Alternative Investment Market. This week we turn to finding dividend diamonds.
Investors neglect dividends at their peril. Over the twenty-five years to the end of 2017 the average annual return from the FTSE All Share based on share price alone stood at 5.5 per cent compared with a 9.2 per cent total return once dividends are factored in. And the benefit of reinvesting dividends over the long-term makes the difference even more pronounced with the 25-year cumulative total return from the FTSE All Share standing at 727 per cent compared with 310 per cent ignoring dividends.
As well as providing income, a good yield can suggest a company has attractive qualities that could support share price performance, and a robust dividend record can indicate a company in good financial health with a strong and stable business.
Our Alpha dividend yield screens aim to seek out shares that offer attractive yields along with other characteristics that suggest the yield may grow, or at least be maintained, in future years. The characteristics the Alpha dividend screens look for are different for larger companies - where safer and more stable dividends are sought - and smaller companies - where the prospects for dividend growth tend to be better.
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