Geraldine Weiss-Lite Screen: Three dividend darlings for scrupulous investors

Friday, Dec 16 2011 by
Geraldine WeissLite Screen Three dividend darlings for scrupulous investors

Dividend paying stocks can be a hugely attractive option for investors seeking to cushion their portfolios from market volatility – yet selecting income-generating shares comes with risks. While companies with frothy current yields may prove an immediate temptation, applying some additional metrics to limit downside risk can help investors taking the plunge to sleep at night.

For more than 50 years Geraldine Weiss has been widely regarded as one of the investment community’s most astute dividend hunters. The now retired editor of the US dividend newsletter Investment Quality Trends (, Weiss developed a formula for identifying companies with strong dividend track records that are attractively valued in the market.

Weiss, of course, is not alone in formulating methods to select dividend stocks. Last week we considered another strategy known as Dogs of the FTSE 100 - a technique that calls on investors to pick out the 10 highest dividend yielding stocks in the index, invest in each one and then tuck the portfolio away for one year. In the same way, Weiss’s strategy looks for high yielding stocks that are apparently mis-priced – but her approach is much more demanding, requiring ongoing review and additional criteria. You can read more about it here.

At its heart, the technique looks for quality and value. It uses the dividend yield of a stock (derived by dividing the dividend per share by the stock price) as the critical measure of its valuation. If the yield is high it may signal a buying opportunity, if it the yield is low or drifting lower then that could be an indication to sell. Each company also needs to have a good quality track record and pass an additional set of robust criteria to prove it.

Weiss given the PRO treatment

Using Stockopedia Premium we have designed a Geraldine Weiss screen to get as close as possible to her criteria given the limitations of our UK based data set. Weiss liked her companies to have a 25 year dividend history, known in the US as “Dividend Aristocrats” but unfortunately, in the UK, these companies are as rare as hen’s teeth and the equivalent UK index covers just five years (known as Dividend Achievers), so we’ve relaxed this criterion and one or two others that are more US market specific.

As a…

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way


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. 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. ?>

Do you like this Post?
7 thumbs up
0 thumbs down
Share this post with friends

Smith & Nephew plc is a medical technology company. The Company is engaged in developing, manufacturing, marketing and selling medical devices and services. Its products and services include Sports Medicine Joint Repair, Arthroscopic Enabling Technologies (AET), Trauma & Extremities, Other Surgical Businesses, Knee Implants, Hip Implants, Advanced Wound Care, Advanced Wound Bioactives and Advanced Wound Devices. The Sports Medicine Joint Repair franchise offers surgeons a range of instruments, technologies and implants necessary to perform minimally invasive surgery of the joints, including the repair of soft tissue injuries and degenerative conditions of the knee, hip and shoulder. The AET franchise offers an array of minimally invasive surgery-enabling systems and devices. The Trauma & Extremities franchise supports healthcare professionals with solutions used by surgeons to stabilize severe fractures, correct bone deformities, treat arthritis and heal soft tissue complications. more »

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

N Brown Group plc is a digital specialist fit fashion retailer. The Company offers customers a range of products in clothing, footwear and home wares. The Company is a multichannel retailer. It operates through the Home Shopping segment. Its power brands include JD Williams, Simply Be and Jacamo. JD Williams is a department store concept offering style for 50-plus customers and their families. Simply Be is a women's clothing retailer, which offers a fashion collection regardless of the size. Jacamo offers in-house ranges, such as Label J and Black Label, alongside international brands. Its brands also include Ambrose Wilson, Julipa, Premier Man, House of Bath, Marisota, Fashion World, High and Mighty, and Figleaves. It offers financial services that focus on credit customer base and cash customers. It offers womenswear from sizes ranging from 10 to 32 and menswear from sizes ranging from small to 5XL. It operates a store estate in the United Kingdom that focuses on key shopping areas. more »

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

  Is LON:SN. fundamentally strong or weak? Find out More »

1 Comment on this Article show/hide all

MadDutch 24th Dec '11 1 of 1

Your dividend darlings report.

I am sad to say so, but there is something seriously wrong here. This article is not to Stockopedia's usual high standard.

First, how on Earth can you list Smith & Nephew as one of only 3 "dividend darlings" in most of the market and the only one in the Footsie 100? List the whole Footsie index in Sharescope, then double click on the yield column and you will see that S&N is ranked at 79 out of 100. Of the 21 below S&N, 9 pay no dividend at all. By dividend yield, S&N is a dog and not a darling!

I have my own system for finding the real winners. I base it on a system which listsshares by 7 year periods, 5 historic and 2 forecast. I value 20 different facts (ie interest paid, Director buying / selling, institutions holding stock etc), forecasts (ie eps and dividend estimates for the next 2 years), and historic plus forward ratios (gearing, price to book for tangible assets, cash flow exceeding eps, historic profits, eps, eps growth, dividends and dividend growth). I rate each in one of 5 ways; superb, good, poor, bad or no comment.

The elite businesses are then judged whether they qualify for my top classification, GTR, Growth Throughout Recession. To qualify, I look for growth in normalised pretax profits, earnings per share and dividends, all of these and others in every year, plus a minimum current dividend yield of 4% plus good cover in the last year. That is 21 tests over 7 years with the additional 2 relating to dividends. If a share fails on one test only out of 23, the stock is not considered for GTR. Equivalent to a perfect 10 out of 10 in Strictly Come Dancing.

I have records going back to 1997, the oldest included records back to 1992, and there are several GTR stocks that feature in all my past years research. Tesco for example.

This is a big job, I tend to do it once a year, and the last one took me 6 days over Christmas 2011.

Mrs. Weiss has muych less stringent tests than me, but over a longer period. She accepts poor years, I do not tolerate them. You have used her methods to find 3, including the dividend dog above.

I found 31 GTR businesses in December 2010 (some have been rejected since, hard times like these do sort out the over optimistic!).


I am not willing to divulge more of my method at this time.

If someone would like me to help them, I am available for employment.

| Link | Share

Please subscribe to submit a comment

About Ben Hobson

Ben Hobson

Stockopedia writer, editor, researcher and interviewer!


Stock Picking Tutorial Centre

Most Popular Now

Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis