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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 1.2% -1.2% -3.6% -0.6% 2.9% -1.2% -1.5% -0.3%
1 month 2.7% -0.7% -1.0% -2.9% 1.0% 0.7% 0.1% 3.1%
3 months 2.1% -2.4% 1.5% -16.4% 6.0% 1.5% 0.2% -1.3%
6 months 5.9% 0.9% 3.1% -19.1% 10.6% 11.7% 5.4% 0.7%
1 year -3.2% -3.4% -7.1% -29.7% -2.3% 19.2% -1.3% -0.3%
2 years 1.9% -19.4% -8.9% -5.4% -12.8% 33.0% 8.3% 1.0%
Annualised 16.1% 6.4% -1.1% 14.3% 2.7% 19.4% 13.0%
 
Risks
Max Drawdown -27.2% -36.6% -32.4% -36.7% -32.9% -18.4% -17.1%
Avg Holdings 11.1 11 11 8.8 9.7 13.1 12.9
Diversification Moderate Moderate Moderate Moderate Moderate Moderate Moderate