Large Cap Dividend Attraction is an income strategy discussed by Kevin Matras in his book, Finding Number 1 Stocks. It focuses on dividends paid by strong, large-cap companies with long track records of both earnings and dividend growth and where analysts are upgrading their earnings forecasts. This version of the strategy assesses 5-year dividend growth, Return on Equity, earnings per share growth and Price to Operating Cashflow. It also look for the highest percentage EPS upgrades over the past three months for the next financial year. Kevin Matras explains: "Larger companies with solid earnings, but without the aggressive growth rates that may have marked their earlier years, will often reward their investors by paying out a portion of their earnings as dividends."
Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies
by Kevin Matras
Kevin's backtesting found that his version of this strategy had an average annual compounded return of 20.6% (that's while taking on about 40% less risk than the S&P 500).
This screen uses the following criteria:
Results are sorted by:
And limited to the first 50 Results
| Returns |  |
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FTSE 100 |
|---|---|---|---|---|---|---|---|---|
| 1 week | -2.7% | -4.2% | 1.8% | -3.1% | -1.2% | -5.5% | 0.6% | -2.7% |
| 1 month | -3.9% | -7.1% | 2.9% | 5.5% | -3.6% | -6.7% | -0.5% | -3.9% |
| 3 months | 3.1% | -8.4% | 6.3% | 8.8% | 5.8% | -3.8% | 3.1% | 7.4% |
| 6 months | -2.5% | -8.7% | 0.9% | -0.6% | -5.6% | -9.8% | -8.0% | -0.6% |
| 1 year | -1.1% | -9.2% | 7.2% | 24.0% | 5.7% | -4.0% | -11.3% | 1.5% |
| 2 years | 3.5% | 23.4% | 46.1% | 62.5% | 34.5% | 34.0% | 27.2% | 21.4% |
| Annualised | 6.4% | 3.8% | 16.7% | 24.4% | 16.5% | 16.9% | 18.8% | |
| Risks | ||||||||
| Max Drawdown | -28.9% | -17.5% | -17.8% | -19.8% | -16.7% | -15.9% | -20.8% | |
| Avg Holdings | 7 | 19.6 | 24 | 3.7 | 7.6 | 23.5 | 4.8 | |
| Diversification | Low | Good | Good | Low | Low | Good | Low | |
Studies based on equal weighted portfolios of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
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Ticker | Name | Mkt Cap £m | ROE % | EPS 5y CAGR % | P/OCF | DPS 5y CAGR % | % 3m EPS Upgrade FY2 | DPS Gwth % | Yield % | Flag |
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