A dividend screen which envisages that an investor annually selects for investment the ten FTSE-100 stocks whose dividend is the highest fraction of their price. This version uses the historic/actual yield.
Proponents of this strategy (or its US equivalent, the Dogs of the Dow) argue that blue chip companies do not alter their dividend to reflect trading conditions and, therefore, the dividend is a measure of the average worth of the company; the stock price, in contrast, fluctuates through the business cycle. more »
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