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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 -3.7% -1.4% -2.1% -3.4% -1.2% -2.7% -0.1% -1.5%
1 month -2.0% -1.4% -1.1% 1.0% -2.5% 2.6% -3.0% -1.4%
3 months -11.2% -12.7% -10.4% -12.4% -16.3% -3.6% -9.7% -8.5%
6 months -16.0% -15.0% -1.4% -9.1% -16.1% -5.2% 0.4% -10.7%
1 year -4.8% -17.3% -3.6% 9.9% -19.7% 1.6% 2.7% -6.0%
2 years 5.6% -24.4% -21.4% 60.9% -15.4% 33.5% -0.4% 2.5%
Annualised 17.2% 7.4% -1.0% 31.5% -0.1% 17.4% 15.2%
 
Risks
Max Drawdown -18.9% -33.5% -30.4% -20.3% -25.3% -18.4% -17.1%
Avg Holdings 11.4 10.9 11.3 9.5 10.5 13 13.2
Diversification Moderate Moderate Moderate Moderate Moderate Moderate Moderate