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Trailing yield a cautious value indicator

Our dividend diamond screen is yet to recover from the pandemic
Trailing yield a cautious value indicator
  • Few stable large-cap income stocks score well on our dividend diamond screen.
  • Smaller companies that rank well may be better considered as value stocks.

Genuine large cap income stocks that score well against our safe yield tests are few and far between. Aerospace and defence company BAE Systems (BA.) only comes up short on our dividend growth test.  Private equity and infrastructure focussed investment company 3i Group (III) fails our eps growth test. Miner Rio Tinto (RIO) fails the same test, as well as the dividend cover requirement. 

Many of the other FTSE All Share constituents scoring  at least 6/8 on the screen are mid-cap or small-cap companies. Here the dividend yield may be more an indication of value, rather than a sign of a cash cow stock to rely on for income over a longer time frame.

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