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This is the 'winning formula' for dividend investing, says Trivariate Research's Adam Parker
Trivariate Research founder Adam Parker has a 'winning formula' for dividends and a list of long stock ideas.
TL;DR
- Trivariate Research's 'winning formula' for dividend stocks focuses on large-cap companies that grow their payouts.
- Stocks with a market cap of at least $10 billion and specific dividend yield or growth criteria have outperformed.
- Companies with high cash reserves (cash to market cap above 25%) and net cash (above 10%) that increase dividends show significantly better performance.
- Cheap companies (valuation less than 10-times price-to-forward earnings) that boost payouts outperform more expensive dividend growers.
- Lower payout ratio companies that raise dividends strongly outperform their industry peers post-announcement.
- Synchrony Financial, Travelers, and Chubb are mentioned as examples of companies increasing their dividends and exhibiting strong financial characteristics.