One of the best ways to exploit the Stock Screener and its Dynamic Filters is to put it at work to find the best dividend stocks out there in the market.
First of all, we need to have clear in mind what we are looking for when searching for "high-quality dividend stocks".
It is fairly obvious that such a stock has to pay a quite high dividend compared to its currently traded price (i.e. Dividend Yield), but it is definitely not enough: the risk is to buy a high-dividend low-quality stock that probably:
Will have an unstable dividend, thus we might see its dividend drop or even be suspended;
Will drop in price and thus the - unstable - gains from dividends will be canceled out by the sale of the stock.
To avoid that, we should consider more stringent filters while screening stocks.
Let's express what we want in words before, and then move on to the Prometeus' Stock Screener to see how easy it is to set our filters up.
"We are looking for stocks with (1) a strong record of consistently high dividends, (2) a history of stable or increasing dividends, (3) the capacity to fully cover the expense of those dividends, and (4) reasonable market capitalization."
To translate our requirements into more precise terms, we are looking for:
(1) stocks with a consistently high Dividend Yield, let's say more than 4% for 10 consecutive years.
(2) companies distributing a Trailing-Twelve Months Dividend (Dividend TTM) that has never decreased in 10 years.
(3) companies whose income has been great enough to completely cover the payment of their dividends, which means to have had a Payout Ratio lower than 100%. Let's say one more time we want this condition to be satisfied for 10 years.
(4) stocks having a Market Capitalization of at least 2 billion dollars.
We are definitely selective enough!
Fortunately, Prometeus' Stock Screener helps us to screen 34,000+ global stocks in a few seconds to highlight those that respect our strict requirements.
Let's see how to set up our research.
Prometeus Stock Screener to find the best dividend stocks
Open the Stock Screener by selecting it from the menu on the right:
Once you open it, it takes as long as 1 minute to put our filters to work and to extract our list of Dividend Monsters!
Here is an example of how to set up the Screener with the filters described before:
One of the selected stocks is Enagás S.A. which shows an amazing Dividend Yield of 9.16% considering all the strict requirements we wanted!