No companies pass all 8 tests for our dividend yield screen. There are 17 that score 7/8, with the tests failed providing valuable pointers for income investors’ further research.
British American Tobacco (BATS) fails the dividend growth test and house builders Barrett Developments (BDEV) and Redrow (RDW) do not convert a high enough proportion of profits into cash, according to the screen’s criteria.
Another important point is many companies that now have attractive yields suffered negative share price momentum in recent months, highlighting that investors need to look at other measures than yield in case they fall into a value trap.
Download PDF