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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 -1.5% -2.2% -2.0% 4.7% 0.3% -2.4% 3.4% -0.7%
1 month -2.1% -4.9% -1.0% 0.5% 1.9% -5.9% 1.7% -2.6%
3 months 5.5% 0.7% -5.8% 8.9% 1.9% 8.1% 4.3% 1.4%
6 months 3.4% -2.5% -3.9% -7.7% 3.7% 16.8% 1.7% 4.7%
1 year -12.1% -15.2% -6.2% -14.9% -13.0% 8.4% 1.8% -5.7%
2 years -11.1% -29.9% -17.3% 22.3% -16.0% 26.5% 8.3% -3.2%
Annualised 16.5% 6.6% -1.4% 23.4% 1.1% 19.5% 13.2%
 
Risks
Max Drawdown -27.2% -36.6% -32.4% -26.7% -32.9% -18.4% -17.1%
Avg Holdings 11.3 10.9 11.3 9 10.1 13.1 13.2
Diversification Moderate Moderate Moderate Moderate Moderate Moderate Moderate