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Dividend Stock Research – The Companies That Matter To You

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Locating attractive dividend-paying companies is one of the first steps to successful investing. Finding those quality dividend stocks can be a challenge. There are literally thousands of equity names to choose from. On top of that, there is almost too much information available for investors searching for information online.

In previous posts, I’ve explored filtering tools that I like to use. This post will examine those tools in more detail. I’ll also look at some additional stock-screening resources available to individual investors. Not all of these are created equal, and I’ll tell you about the bad along with the good. You might find some of them useful for locating your next dividend paying winner.

Build A list of Companies

What I have found over the past few years of investing on my own is that you need a list of companies that you like and would be happy to invest in. You build a list and you add or remove companies based on your goals. I recommend casting a wider net initially to ensure you don’t eliminate a company for the wrong reasons.

For example, I did not have Bombardier on my list at first, then I added it, followed it for a while and then decided it was not meeting my criteria. You want to be flexible. I track just under 100 companies between the US and Canada. Every now and again I add a company and sometimes I remove one. I am conscious of the sectors I need to cover and I make sure I have companies in those areasl.

Quick Dividend Filtered List

A quick way to get started is to pick an already filtered list. There are a few and many look at generating them over time. One list I would love to put my hands on is the list of dividend companies that match the 10 / 10 rule.

Dividend Aristocrats

I provide an update list annually of the dividend aristocrats. The list I provide highlights the addition and removal with some extended data on their yield and market cap for an easy filter.

In short, the dividend aristocrats must increase their dividends annually for a number of consecutive years to be included. The Canadian list is much more lenient than the US list as it requires the company to have increase their dividends for a minimum of 25 years. See each list for the details and the requirements.

Dividend Achievers

Another index focused on tracking companies that have increased dividends for 10 years running. I have not looked into that list much and it is restricted to US companies at the moment. There are more than one index following the achievers.

Dividend Champions

Another list maintained by David Fish of DirectInvesting.com. The list is provided in Excel or PDF format and has a wealth of data to look at. Dividend Champions require the companies to have paid dividends for at least 25 years in a row. No requirements on dividend increase here.

Tools To Filter Down Companies

The following are quick filters to further narrow down your search. A large yield is not always a good candidate so be careful what you include and exclude.

  • MSN Money - Although popular with some investors, I found the site to be poorly designed and slow to load. While doing research for this post, I had Money open in my browser along with a few other screeners. MSN was the only one that didn’t run properly, it slowed everything down. The ScoutScreener tool filters through several thousand companies and orders them by different criteria, like dividend yield. The tool lacks a way to narrow down your search and find stocks in a specific industry. You are better off skipping this screener altogether.

  • Yahoo Finance - This screening tool has an almost primitive-looking design. But don’t let that fool you. This simple screener is powerful and easy to use. It has a wide range of industries from which to choose. You can keep it very broad or narrow down your search and make if very specific. Then, filter even further by your own set of criteria like minimum yield, EPS growth, or PE ratios. These filters will leave you with a nice short list from which to begin further research. One downside; the filtering criteria is somewhat limited. Although not fancy, this is a solid screening tool.

  • Google Finance - I am a fan of Google products. So, I have bit of a bias and thought I would like it the best. I was not disappointed. The screener tool has a clean design and a wide variety of filtering criteria to choose from. However, its industry narrowing feature is not quite as robust as Yahoo Finance. Google Finance is much better than MSN Money, but not quite as good as Yahoo.

  • TMX Stock Screener - I use this tool to find Canadian or American dividend paying stocks. This screener is similar to the Yahoo Finance tool, simple and easy to use. Add or remove filtering criteria as you see fit.

  • Globe Investor Screener - This tool is part of the Globe and Mail, it allows for Canada specific searches. Premium features are locked and available only to paid subscribers. I have found that it provides me with a very good and consistent snapshot of finances for a 12 year period without the subscription. It’s the tool I use the most in my in-depth dividend stock analysis. I basically show the data in a different way that is easy to visualize.

  • Finviz – Financial Visualization - No Canadian research for this one.

  • Your Discount Broker - Your online broker probably has stock filtering tools available. These should be free to use along with your account. Some brokers offer sophisticated, premium screeners to their clients. Of course, there are too many to review in this post. These screeners can be a valuable resource for finding dividend paying stocks.

This review is subjective and your preferences may differ. Experiment with different screeners to see which one works best for you. As I’ve explained in other posts, filtering for dividend stocks is just one piece of the whole process. Never purchase an investment without exploring fundamental and looking at company metrics that matter.

The List for Success

If you can focus on managing one list that works for you, it will greatly simplify your work as you can ignore the hot stock of the week and the noise in the markets. You basically only have to do the following:

  • Add companies to your list to monitor

  • Remove companies that do not match your criteria anymore

  • Review the metrics that matter to you
  • Invest from the list because you did all the screening already.

Dividend Stock Research Series

Readers: Do you have a list? How are you managing your list? 

Image: cooldesign / FreeDigitalPhotos.net

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2 Responses to "Dividend Stock Research – The Companies That Matter To You"

  1. I am 72, just recently converted most of my IRA and Trust portfolios to 15 items in the 100 best….But I just can’t seem to let go of the stocks like FB, NLY, PSEC and ARCP. The latter 3 don’t satisfy the holding criteria, but do pay dividends. FB pays no dividends, but I got in early, and look to hold long term.
    My dilemma is whether to drop my 3 high yielders in favor of adding more aristocrats. Any thoughts?

    • @Joel
      I can’t tell you what you should do with the stocks but what I can tell you is to outline the reasons you keep them and make sure they fit your strategy for retirement. I assume you need income from your investments and your strategy and retirement plan would ensure you don’t run out of money and you can get enough income.

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