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Winning Growth & Income 14 Qualifying

Winning Growth & Income is a dividend investing strategy inspired by an approach used by American investment analyst Kevin Matras in his book, Finding #1 Stocks. It combines growth and dividend factors by sorting the market for high yielding companies with strong growth characteristics. Apart from a high yield, this strategy looks for companies with an above average return on equity, a below average price-to-earnings ratio and where analysts have been upgrading their earnings forecasts. It also looks for companies with a low beta (the sensitivity of a share price to the movement of the market). Kevin Matras says the screen works for investors that are "looking for good companies with solid revenues that pay a good dividend". In some respects, this strategy is a small cap version of the Large Cap Dividend Attraction strategy. In Matra's original strategy criteria he uses Zacks Rank, which is a metric for analysing analyst forecasts.

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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:

  • % 3m EPS Upgrade FY2 > 0
  • ROE % > 1.002 x Median ROE %
  • P/E Rolling 1y < Median P/E Rolling 1y
  • Gross Gearing % < 100
  • Yield % > Median Yield %
  • Beta < 1
  • Mkt Cap £m > 20

Results are sorted by:

  • Yield % in descending order


And limited to the first 14 Results


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Performance Tracking


Returns FTSE 100
1 week -0.3% 1.3% -2.6% -6.4% -2.1% 1.7% 1.0% 2.5%
1 month -4.6% -8.6% -5.6% -6.6% -7.0% -1.7% -3.3% -1.0%
3 months -4.8% -5.3% 1.4% -5.7% -1.5% -3.9% 1.9% -0.9%
6 months -0.9% -14.8% 9.4% 1.2% -6.1% -3.4% 8.9% 6.4%
1 year 2.9% -15.6% -3.1% 30.4% -10.6% 11.5% 9.4% 3.1%
2 years 9.4% -18.5% -13.4% 77.3% -3.6% 36.4% 10.8% 9.6%
Annualised 19.0% 8.6% 0.2% 37.0% 4.6% 19.8% 19.7%
 
Risks
Max Drawdown -18.9% -32.4% -30.4% -13.3% -15.4% -18.4% -17.1%
Avg Holdings 11.5 10.9 11.3 9.6 10.5 13.1 13.2
Diversification Moderate Moderate Moderate Moderate Moderate Moderate Moderate