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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 0.4% 3.1% -1.3% -1.1% 1.8% 5.7% 3.4% -0.2%
1 month 0.5% 1.1% -7.6% 9.1% -1.5% 6.1% 3.9% 0.4%
3 months 12.7% 5.0% 2.4% -10.2% 12.0% 14.3% 3.9% 7.2%
6 months -8.7% -5.2% -10.5% -10.8% -10.0% 9.6% -5.2% -3.8%
1 year -9.4% -18.6% -1.7% -10.2% -15.7% 4.9% 3.2% 3.7%
2 years -12.6% -32.4% -27.5% 17.9% -21.7% 23.0% -5.6% -1.6%
Annualised 16.1% 6.9% -2.2% 25.0% 0.2% 19.8% 14.0%
 
Risks
Max Drawdown -27.2% -36.6% -32.4% -26.7% -32.9% -18.4% -17.1%
Avg Holdings 11.4 10.9 11.4 9.2 10.2 13.1 13.3
Diversification Moderate Moderate Moderate Moderate Moderate Moderate Moderate