Rally Oversight? Continue to Watch These 3 Dividend Stocks for Potential Growth Surge
In the ever-evolving world of investment, finding dividend stocks that not only pay a consistent yield but also exhibit strong technical analysis and analyst support can be a challenging task. Here's a step-by-step guide to help you identify such stocks using a stock screener tool.
Step 1: Choose a Stock Screener with Comprehensive Filters Select a stock screener that offers both fundamental and technical analysis filters, along with access to analyst ratings or estimates. Platforms like Finviz, Zacks Investment Research, and others offering real-time data and alerts are suitable options.
Step 2: Apply Fundamental Filters for Dividend Stocks Focus on these key fundamental criteria to identify dividend-paying stocks: - **Dividend Yield**: Set a minimum threshold (e.g., > 2% or as per your preference) to filter for stocks that consistently pay dividends. - **Dividend Growth Rate**: If available, include filters that show a history of dividend growth. - **Payout Ratio**: Look for sustainable dividend payouts (usually below 60%-70%). - **Market Capitalization**: Filter for large-cap or stable companies, which are more likely to maintain dividends. - **Earnings Stability/Growth**: Include earnings growth or stable earnings to ensure the dividend is supported by company fundamentals.
Step 3: Apply Technical Analysis Filters Include technical filters to identify stocks with strong price momentum and favorable trends: - **Price above Moving Averages**: For example, price above 50-day and 200-day moving averages suggests an uptrend. - **Relative Strength Index (RSI)**: Look for RSI in bullish ranges (e.g., 40-70) to avoid overbought or oversold extremes. - **Volume**: Filter for increasing volume on up days, indicating buying interest. - **Price Patterns or Breakouts**: If available, use filters for stocks breaking out of resistance or showing bullish chart patterns.
Step 4: Incorporate Analyst Ratings and Estimates Choose a screener that integrates analyst recommendations and earnings estimate revisions, such as Zacks Investment Research: - Use filters for Zacks Rank or analyst consensus ratings to find stocks with "buy" or "strong buy" recommendations. - Set alerts for positive revisions in earnings estimates, which often precede stock price rallies. - Focus on stocks with strong earnings projections, as this indicates analyst confidence supporting the dividend payouts.
Step 5: Customize and Backtest Your Screening Criteria Refine your filters based on your risk tolerance and investment horizon. Some screeners offer backtesting to see how your criteria would have performed historically, helping validate your strategy before investing.
By following these steps, you can efficiently discover dividend stocks that are technically strong and analyst-endorsed, improving your chances of selecting quality income investments.
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### Summary Table of Key Filters for Dividend Stocks with Technical and Analyst Support
| Filter Type | Suggested Criteria | Purpose | |----------------------|---------------------------------------------------|------------------------------------------| | Fundamental | Dividend yield > 2%, stable or growing dividends, payout ratio < 70%, positive earnings growth | Identify strong, sustainable dividend payers | | Technical | Price > 50- and 200-day MA, RSI 40-70, volume up on rallies, breakouts | Confirm positive price trends and momentum | | Analyst Support | Zacks Rank 1 or 2, buy/strong buy recommendations, positive earnings revisions | Validate stock prospects with analyst confidence |
Using these combined filters in a robust stock screener will help you efficiently discover dividend stocks that are technically strong and analyst-endorsed, improving your chances of selecting quality income investments.
Notable stocks identified using this approach include Tapestry Inc (TPR), which pays a forward annual dividend of $1.40, translating to a yield of approximately 1.55%, and NetEase, a Chinese company providing internet and game services, with a forward annual dividend of $2.70, translating to a yield of approximately 2.03%. Both stocks are currently rated as "Strong Buy" by analysts.
L3Harris Technologies Inc (LHX), a U.S.-based defense contractor, pays a forward annual dividend of $4.80, translating to a yield of approximately 1.88%. The stock is also rated as a "Strong Buy" by analysts. However, it's worth noting that L3Harris Technologies Inc (LHX) saw a slight decrease in sales compared to the same quarter last year, while NetEase and Tapestry Inc (TPR) reported sales growth.
By employing this strategy, you can efficiently discover dividend stocks with strong technical analysis and analyst support, potentially enhancing your investment portfolio's performance.
- To streamline the search for income investments, one can leverage smartphones and technology by using stock screener apps like Finviz or Zacks Investment Research that offer filters for fundamental, technical analysis, and analyst support.
- For personal-finance enthusiasts seeking dividend stocks, it's advisable to consider investing in businesses that exhibit not only a consistent dividend yield but also strong technical analysis and analyst endorsements.
- When investing in dividend stocks, it's essential to investigate the potential returns on gadgets such as smartphones to ensure your investment portfolio remains well-diversified and resilient to market fluctuations.
