STOCK IDEAS | Updated: 3-Nov-17
In-house focus list of the most compelling investment and trading opportunities in the eyes of Briefing.com’s analytical team. Also incorporates periodic Special Situations reports on theme-based market opportunities.

Yield Leaders Rankings for November 3, 2017

Yield Leaders is designed for investors who are looking for a combination of dividend income and capital appreciation. Published every Friday, our weekly rankings are derived from a proprietary screen that heavily weights a metric called Shareholder Yield. While not very well-known, this metric allows investors to screen for companies that not only offer attractive dividend payments, but also offer the potential for capital appreciation that is inherent in large, active buyback programs.

For those who aren't familiar with it, Shareholder Yield is calculated as the sum of the annualized dividend yield plus the percentage of shares outstanding that the company has bought back over the past 12 months. For example, if Company XYZ has an annual dividend yield of 3%, and bought back 4% of its shares outstanding over the past 12 months, this equates to a Shareholder Yield of 7% (3% + 4% = 7%). Essentially, this ratio allows investors to quantify and screen for something that has always been very subjective: managements that are "shareholder-friendly." As such, screening for Shareholder Yield provides a much more targeted list of companies that are aggressively returning cash to their shareholders than you would get by looking at dividend yield alone.

In addition to the yield aspect, the "leaders" part of the title refers to the second component of the system: we require that stocks on our rankings show above-average 6-month Relative Strength, which ensures that our list is populated with high-yielding stocks that are also undergoing a healthy level of accumulation. There are no growth, profitability, or valuation requirements.

To sum up, the companies on our list will feature management teams that are decidedly shareholder-friendly, as evidenced by attractive dividend payouts and/or active share buyback programs. While the system doesn't have any valuation criteria, readers will find that these companies will often feature reasonable valuations as well.

All Yield Leaders content is published under the custom ticker "YIELD", which makes it simple to search for commentary and set up alerts.

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Questions or comments? Please send your thoughts directly to Robert Reid at rreid@briefing.com.

     

  • Additions: FE, GNTX, HLS, SYY, USB, WFC
  • Deletions: ANF, ETR, MSFT, RL, UPS, WDR

To address feedback regarding the YIELD list's rate of turnover: much of the week-to-week turnover in the Yield Leaders list can be attributed to two factors: 1) the earnings season-related refresh of dividend and share repurchase data, and 2) stocks whose RS ranks are oscillating just above or below the "Relative Strength > 50" requirement.

          

 

The following table contains a list of stocks that we believe should be particularly attractive to yield investors who are also looking for capital appreciation. Yield Leader components are derived from a quantitative screen that relies on Shareholder Yield, 6-month Relative Strength, and various other secondary criteria. The rankings are based on Shareholder Yield Rank, in descending order. There are no growth, profitability, or valuation criteria applied to this list.

As with any quantitative screen, we encourage readers to further investigate any metric that appears to be unusually high (for example, a Shareholder Yield of 20+%), since it could be inflated by a large one-time event that can't reasonably be extrapolated into the future.

*** If you would like to copy and paste the Yield Leaders components into your chart watchlist or spreadsheet, click here to pull up an unformatted ticker list.

Yield Leaders: November 3, 2017
          Mkt Cap RS Sh. Yield Div Buyback Shareholder
Rank Name Ticker Price Sector (mln) Rank Rank Yield Yield Yield
1 Kohl's KSS $42.00 Department Stores $7,121 52 99 5.2% 7.5% 12.7%
2 Target TGT $59.79 Discount Stores $32,659 60 97 4.1% 5.4% 9.6%
3 Boeing BA $260.73 Aerospace & Defense $156,417 84 96 2.2% 7.1% 9.3%
4 Sysco SYY $56.54 Food Distributors $29,191 61 95 2.4% 6.4% 8.8%
5 Valero Energy VLO $81.33 Oil Refining/Marketing $36,035 86 94 3.4% 4.8% 8.3%
6 Guess? GES $16.64 Apparel/Footwear $1,396 90 93 5.4% 2.3% 7.6%
7 Travelers Cos TRV $133.85 Insurance $36,864 61 93 2.1% 5.4% 7.6%
8 American Eagle Outfitters AEO $13.07 Apparel/Footwear Retail $2,353 58 92 3.8% 3.8% 7.5%
9 W.W. Grainger GWW $200.58 Wholesale Distributors $11,341 81 92 2.6% 5.0% 7.5%
10 BB&T BBT $49.11 Major Banks $39,123 66 92 2.7% 4.5% 7.2%
11 McDonald's MCD $168.24 Restaurants $136,161 65 91 2.4% 4.7% 7.1%
12 Home Depot HD $164.18 Home Improvement $191,805 56 91 2.2% 4.9% 7.1%
13 SunTrust Banks STI $59.91 Regional Banks $28,865 57 91 2.6% 4.5% 7.1%
14 Williams-Sonoma WSM $50.05 Specialty Stores $4,274 51 91 3.1% 3.8% 6.9%
15 T. Rowe Price TROW $94.64 Investment Managers $22,930 84 91 2.4% 4.5% 6.9%
16 Union Pacific UNP $117.02 Railroads $93,193 63 89 2.0% 4.5% 6.6%
17 MetLife MET $55.04 Life/Health Insurance $59,132 77 88 2.9% 3.6% 6.5%
18 Fifth Third Bancorp FITB $29.13 Regional Banks $20,642 73 88 2.2% 4.3% 6.5%
19 PNC Financial PNC $137.75 Major Banks $65,851 65 88 2.2% 4.2% 6.4%
20 Aflac AFL $84.12 Life/Health Insurance $33,247 58 87 2.1% 4.1% 6.3%
21 Pfizer PFE $35.36 Pharmaceuticals: Major $210,893 53 87 3.6% 2.6% 6.2%
22 Cisco Systems CSCO $34.09 Computer Comms $169,400 57 86 3.4% 2.7% 6.1%
23 Wells Fargo WFC $56.03 Major Banks $280,364 54 86 2.8% 3.2% 5.9%
24 Wal-Mart WMT $89.56 Discount Stores $265,264 77 85 2.3% 3.6% 5.9%
25 Lockheed Martin LMT $310.02 Aerospace & Defense $89,134 56 84 2.6% 3.1% 5.7%
26 HP HPQ $21.39 Computer Hardware $35,810 74 84 2.5% 3.2% 5.7%
27 Gap GPS $26.08 Apparel/Footwear Retail $10,373 58 84 3.5% 2.2% 5.6%
28 Eaton Vance EV $50.92 Investment Managers $5,952 59 84 2.4% 3.2% 5.6%
29 Texas Instruments TXN $96.45 Semiconductors $95,392 82 83 2.6% 3.0% 5.6%
30 Andeavor ANDV $109.55 Oil Refining/Marketing $17,217 80 82 2.2% 3.3% 5.5%
31 Federated Investors FII $31.53 Investment Managers $3,208 76 82 3.1% 2.3% 5.4%
32 U.S. Bancorp USB $54.48 Major Banks $91,485 52 81 2.2% 3.2% 5.4%
33 HealthSouth HLS $48.03 Health Svcs $4,773 56 81 2.1% 3.3% 5.4%
34 Johnson & Johnson JNJ $139.81 Pharmaceuticals: Major $375,572 57 81 2.4% 2.8% 5.2%
35 Ford Motor F $12.43 Motor Vehicles $49,338 68 79 4.8% 0.3% 5.1%
36 Bristol-Myers Squibb BMY $61.99 Pharmaceuticals: Major $101,852 61 79 2.5% 2.5% 5.0%
37 Invesco IVZ $36.02 Investment Managers $14,720 55 77 3.2% 1.6% 4.8%
38 Eastman Chemical EMN $91.46 Chemicals $13,098 65 77 2.2% 2.5% 4.8%
39 Waste Management WM $82.05 Environmental Services $35,454 68 77 2.1% 2.7% 4.8%
40 Intel INTC $46.50 Semiconductors $220,428 94 77 2.3% 2.5% 4.8%
41 Gentex GNTX $19.56 Auto Parts: OEM $5,582 53 76 2.0% 2.7% 4.8%
42 Occidental Petroleum OXY $67.63 Oil & Gas Production $51,960 71 74 4.5% 0.0% 4.6%
43 Garmin GRMN $58.92 Telecom Equipment $11,070 76 74 3.5% 1.1% 4.6%
44 C.H. Robinson CHRW $79.25 Air Freight/Couriers $11,163 77 73 2.3% 2.2% 4.4%
45 FirstEnergy FE $32.70 Electric Utilities $14,502 59 73 4.4% 0.0% 4.4%
46 Paychex PAYX $64.33 Data Processing Services $23,191 69 73 3.1% 1.3% 4.4%
47 3M MMM $231.78 Industrial Conglomerates $138,587 73 72 2.0% 2.3% 4.4%
48 Maxim Integrated MXIM $52.07 Semiconductors $14,733 74 72 2.8% 1.6% 4.4%
49 Ryder System R $82.71 Finance/Rental/Leasing $4,389 75 72 2.2% 2.1% 4.3%
50 Principal Financial PFG $68.37 Financial Conglomerates $19,892 58 71 2.8% 1.4% 4.3%

Data source: FactSet

 

 

  • Lead Analyst: Robert Reid, Senior Equity Analyst, Briefing.com

Yield Leaders content can be found on the Stock Ideas page, located within the Investing & Trading menu. On Live In Play, all of the Yield Leaders content can be searched for, and have alerts generated by, the "YIELD" ticker. Comments or suggestions? Please send them to rreid@briefing.com.