Let me give you my opinion on your questions and describe how I invested my dividend strategy more than 10 years ago.
1. i invest with different weightings in all 11 sectors (according to GICS), i.e.
Basic Materials
Communication
Consumer Discretionary
Consumer Staples
Energy
Financial
Health Care
Industrial
Technology
REITs
Utilities
2 I hold 3 to 5 stocks per sector. This means I am well diversified overall.
3. selection of dividend stocks
I apply the following criteria when selecting stocks:
a) Payout ratio (POR) --> <75% (über drei Jahre hinweg; 1 Punkt)
b) Verschuldungsgrad --> <200% (über drei Jahre hinweg; 1 Punkt)
c) Dividendenwachstumsrate (Dividend Growth Rate DGR) -->>10% ideally over 3,5,10 years (up to 3 points)
d) Return on sales --> >5% (over 3 years; 1 point)
e) Equity ratio --> >=30% (over 3 years; 1 point)
f) Return on equity (RoE) --> >=15% (over 3 years; 1 point)
g) KCV (Price-Cashflow-Ratio; P/FCF) --> <20 (1 Punkt)
i) Free Cash Flow Marge (Free Cashflow Margin;FCM) -->between 5% and 30% (over 3 years; 1 point))
j) Annual earnings growth --> 8%-12% (over 5 years; 1 point)
This makes a maximum total of 12 points if a share fulfills all criteria.
I also add the total return (price gain + dividend). It should be >10% over 1, 3, 5 and 10 years (maximum 4 points).
This makes a maximum total of 16 achievable points.
4. researching all this by hand is tedious. Very tedious. That's why I built a screener with Google Sheet. All I have to do is enter the abbreviation of the share and the points are awarded for all the criteria mentioned, plus of course the total number of points. I use wisesheet.io as a data source in Google Sheet - they provide all the key figures including the history. An excellent extension for Google Sheet.
5. from the 20 to 30 stocks in each sector, I select the 3 to 5 with the highest scores.
6 I look at their business models and study the companies.
7. if everything fits, the selected shares are added to the portfolio.
8 I have defined my target, the total amount I want to invest. This amount is allocated according to the sector key and so I know in which sector or in which shares I am still investing or which I have bought enough of.
9 I buy from the dividend payouts (usually according to Levermann)
This gives me a clearly structured process at the start and avoids any gut feeling. Instead, I focus on long-term quality. And I feel very comfortable with that.
Now to the titles you mentioned. I ran them through the screen. Here are the results:
$O --> 8 out of 16 points (although we shouldn't rate the payout ratio for REITs; I'm sure you know the reasons)
$MAIN --> 10 out of 16 points
$ADC --> 9 out of 16 points
$STAG --> 8 out of 16 points
$BLK --> 14 out of 16 points
$HD --> 14 out of 16 points
$MUV2 --> 14 out of 16 points
$CVX --> 11 out of 16 points
$AEP --> 12 out of 16 points
$WM --> 14 out of 16 points
$SIX2 --> 12 out of 16 points
From my point of view, or according to my criteria, there are some very good stocks, some would not be for me, because there are better alternatives.
In the REITS sector, for example, I would take a look at $VICI (14 out of 16 points) or $PLD (13 out of 16 points).
Feel free to get in touch if you need help. Hope it helps with the composition of your portfolio.
1. i invest with different weightings in all 11 sectors (according to GICS), i.e.
Basic Materials
Communication
Consumer Discretionary
Consumer Staples
Energy
Financial
Health Care
Industrial
Technology
REITs
Utilities
2 I hold 3 to 5 stocks per sector. This means I am well diversified overall.
3. selection of dividend stocks
I apply the following criteria when selecting stocks:
a) Payout ratio (POR) --> <75% (über drei Jahre hinweg; 1 Punkt)
b) Verschuldungsgrad --> <200% (über drei Jahre hinweg; 1 Punkt)
c) Dividendenwachstumsrate (Dividend Growth Rate DGR) -->>10% ideally over 3,5,10 years (up to 3 points)
d) Return on sales --> >5% (over 3 years; 1 point)
e) Equity ratio --> >=30% (over 3 years; 1 point)
f) Return on equity (RoE) --> >=15% (over 3 years; 1 point)
g) KCV (Price-Cashflow-Ratio; P/FCF) --> <20 (1 Punkt)
i) Free Cash Flow Marge (Free Cashflow Margin;FCM) -->between 5% and 30% (over 3 years; 1 point))
j) Annual earnings growth --> 8%-12% (over 5 years; 1 point)
This makes a maximum total of 12 points if a share fulfills all criteria.
I also add the total return (price gain + dividend). It should be >10% over 1, 3, 5 and 10 years (maximum 4 points).
This makes a maximum total of 16 achievable points.
4. researching all this by hand is tedious. Very tedious. That's why I built a screener with Google Sheet. All I have to do is enter the abbreviation of the share and the points are awarded for all the criteria mentioned, plus of course the total number of points. I use wisesheet.io as a data source in Google Sheet - they provide all the key figures including the history. An excellent extension for Google Sheet.
5. from the 20 to 30 stocks in each sector, I select the 3 to 5 with the highest scores.
6 I look at their business models and study the companies.
7. if everything fits, the selected shares are added to the portfolio.
8 I have defined my target, the total amount I want to invest. This amount is allocated according to the sector key and so I know in which sector or in which shares I am still investing or which I have bought enough of.
9 I buy from the dividend payouts (usually according to Levermann)
This gives me a clearly structured process at the start and avoids any gut feeling. Instead, I focus on long-term quality. And I feel very comfortable with that.
Now to the titles you mentioned. I ran them through the screen. Here are the results:
$O --> 8 out of 16 points (although we shouldn't rate the payout ratio for REITs; I'm sure you know the reasons)
$MAIN --> 10 out of 16 points
$ADC --> 9 out of 16 points
$STAG --> 8 out of 16 points
$BLK --> 14 out of 16 points
$HD --> 14 out of 16 points
$MUV2 --> 14 out of 16 points
$CVX --> 11 out of 16 points
$AEP --> 12 out of 16 points
$WM --> 14 out of 16 points
$SIX2 --> 12 out of 16 points
From my point of view, or according to my criteria, there are some very good stocks, some would not be for me, because there are better alternatives.
In the REITS sector, for example, I would take a look at $VICI (14 out of 16 points) or $PLD (13 out of 16 points).
Feel free to get in touch if you need help. Hope it helps with the composition of your portfolio.
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@Investor-College WOW thank you so much for the information you have given me. Will certainly help me 👍
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1Mon
@Investor-College absolutely perfect approach👌👌👌👌
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•@Miro_89 Thanks for your feedback, I appreciate it
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