Saturday, October 19, 2013

Where to Find Dividend Growth Stock

Using a stock screener is one thing, pulling high quality information out of it is another. Here’s a list of metrics I use for FIN VIZ and TMX Stock Screener to build my lists.

TMX Stock Screener (Canadian + US Stocks):

The TMX Stock Screener is interesting as you can get the dividend growth… and you can get it for US stocks as well! So even if it’s a “Canadian Screener”, you can work with it to find US dividend stocks. The combination of FIN VIZ and TMX Stock Screener will definitely give you a complete list of great stock pick possibilities.
5 Year Annual Income Growth Rate: between 1 and 100 (if sales don’t go up, dividend growth will eventually be jeopardized).

Current Dividend Yield: over 3% (I think 3% is reasonable in the current economy. I sometimes cheat and look for over 3% in the hopes of picking a gem with a 2.75% dividend yield).

Return on Equity: Over 10% (I want companies that use my money to create wealth. Keep in mind that you’ll need to look inside each financial statement to see if the ROE is stable over the years).

5 Year Annual Dividend Growth Rate: Over 1% (I know that I told you that we are looking at double digit dividend growth but the crisis in 2008 creates some statistical data errors as several companies stopped their dividend growth approach during that period)

Current Price Earnings Ratio: Under 15 (I’m looking at companies that are undervalued. Since the average P/E ratio of the market is historically around 15, it’s a good start. I sometimes cheat and put 20 if I don’t get what I’m looking for)

FIN VIZ (US Stocks + Some CDN Stocks trading on NYSE)

The only bad news about FIN VIZ is you can’t get the 5 year dividend growth metric. This is why I published a list from the TMX instead of FIN VIZ.  It’s a good thing you can get them from the TMX stock screener! But this stock screener shows others metrics that the TMX doesn’t have… In order to a good research, you have to select other metrics to pick stocks that will show great dividend growth when you look at their financial statements. Here are the metrics I use:

Dividend yield: over 3%

P/E Ratio: under 15
EPS Growth next 5 years: over 5%
Return on Equity: over 10%
Forward P/E Ratio: under 15
Sales Growth past 5 years: positive
EPS Growth past 5 years: over 5%
Payout ratio: under 70%,fa_eps5years_o5,fa_estltgrowth_o5,fa_fpe_u15,fa_payoutratio_u70,fa_pe_u15,fa_roe_o10,fa_sales5years_pos&ft=2

This method was published at

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