How to Screen For High Yield Shares

Saturday, Jan 19 2013 by
8
How to Screen For High Yield Shares

Some of those quality blue chips that occasionally offer themselves up at decent yields have been looking fully valued of late. With the FTSE closing at 6,154 last week, its highest level since May 2008, it sometimes feels like some of my best ideas are running away from me.

Take Reckitt Benckiser (LON: RB.) for example, a company which I admire as it has proved exceptional at generating shareholder value over many years, delivering excellent earnings and dividend growth from a combination of its strong portfolio of everyday consumer branded products and good management. I tend to keep quality shares like this on a watch list and try to patiently accumulate them whenever the yield looks attractive relative to the market. I see from my records that my last purchase of Reckitt Benckiser was in April 2011 when the share price took a small tumble following the resignation of its well respected CEO, Bart Becht, when it was available on a yield of 3.7%. But with the share price having increased by over 30% since then and the dividend growth slowing down, its yield of now barely over 3% holds less appeal. It’s a similar story for other quality consumer staples such as Unilever (LON: ULVR) and Diageo (LON: DGE). Quality or not, no share is worth paying any price for and the value investor in me (or miserliness if you like!) will begin to shy away when those yields drop below that of the market. It usually means there are better ideas out there.

As shares move in and out of fashion and fortunes change, it is always worth keeping an eye out for new ideas. Sometimes I will read the financial news and be inspired to look into a company, but more often than not my research will initiate from a simple share screen.

Share screeners

There are just too many listed companies out there to manually wade through for ideas. There’s about 600 in the FTSE All Share alone, but taking into account other listed companies and AIM shares, never mind the possibility of international shares, there are potentially thousands to choose from. Fortunately, with modern technology, share screening has become a lot easier in recent years as there are many online resources to help us look up lists of shares and have some way of whittling them down to a more manageable size to…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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Tullett Prebon plc is a United Kingdom-based interdealer broker. The Company acts as an intermediary in the wholesale over-the-counter and exchange traded financial and commodity markets, facilitating the trading activities of its clients, in particular commercial and investment banks. It operates in the Europe and the Middle East; Americas, and Asia Pacific segments. It covers over five product groups: Fixed Income Securities and their derivatives; Interest Rate Derivatives, Treasury Products, Equities and Energy. The Company operates a hybrid voice broking business, where brokers, supported by screens displaying historical data, analytics and real-time prices, discover price and liquidity. The Company also operates an information sales business, Tullett Prebon Information, which collects, cleanses, collates and distributes real-time information to data providers, and a Risk Management Services business, which provides clients with post-trade and multi-product matching services. more »

LSE Price
347.3p
Change
-1.9%
Mkt Cap (£m)
861.8
P/E (fwd)
10.3
Yield (fwd)
4.9

Albemarle & Bond Holdings PLC is a United Kingdom-based company. The Company’s services include pawnbroking, gold buying, cheque cashing, travel money and western union. The Company sells luxury watches, gold jewellery, silver jewellery and diamond jewellery. more »

LSE Price
n/a
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

AstraZeneca PLC (AstraZeneca) is a biopharmaceutical company. The Company focuses on the discovery, development and commercialization of prescription medicines, primarily for the treatment of diseases in various therapy areas, including respiratory, inflammation, autoimmune disease (RIA), cardiovascular and metabolic disease (CVMD) and oncology, as well as in infection, neuroscience and gastrointestinal areas. The Company has its operations in over 100 countries. The Company's pipeline includes over 150 projects of which approximately 125 are in the clinical phase of development. The Company is developing a Toll-like receptor 9 (TLR-9) receptor agonist aimed at producing long-term benefit in asthma by addressing imbalances in the immune system. AstraZeneca offers various products, including Accolate, Rhinocort, Bricanyl Turbuhaler, Rhinocort, Symbicort pMDI, Crestor, Seloken/Toprol-XL, Brilinta/Brilique (ticagrelor), Bydureon, Xigduo XR, Kombiglyze XR and metformin XR, among others. more »

LSE Price
5055.2p
Change
-0.9%
Mkt Cap (£m)
64,502
P/E (fwd)
16.7
Yield (fwd)
4.2



  Is Tullett Prebon fundamentally strong or weak? Find out More »


3 Comments on this Article show/hide all

Miserly Investor 20th Jan '13 1 of 3

Interesting piece in the Telegraph on AZN, the 3rd highest yielder in the above screen:

http://goo.gl/2kdCM

A favourite of Neil Woodford and a mainstay of many income portfolios, AZN suffers from a low rating (i.e. the high yield) due to perpetual fears over its "patent cliff" and future growth prospects. Let's see if the new CEO can inject some much needed growth back into the business. He stopped the share buy backs, no doubt to fund his growth strategy, but at least he appears keen on protecting the dividend.

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macd2510 20th Jan '13 2 of 3

The only problem with ABM from my perspective is that it's AIM listed and not eligible for inclusion in my ISA. This is a dealbreaker for me when looking at high yield shares as the taxman looms large like the grim reeper at my marginal rate.

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Miserly Investor 20th Jan '13 3 of 3

Hi macd2510,

Yes, that's an issue with ISAs at present although the Chancellor did announce in the recent autumn statement that this is to be reviewed. I also have a low cost SIPP though which gives the ability to invest in AIM shares within a tax free wrapper.

MI

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About Miserly Investor

Miserly Investor

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