Stock Screens For Intelligent Dividend Picks

By Kapitall:Are you a value investor looking for investment ideas during earnings season?We began by screening the consumer goods industry for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages, indicating that these stocks have strong upward momentum.We then screened for those stocks that appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing," Benjamin Graham.

The price-to-book ratio (P/B ratio) is a popular valuation ratio. It is calculated by taking the latest stock price and dividing it by book value per share.  Book value is simply the total assets found on the balance sheet minus  liabilities, which is referred to as common shareholder’s equity. To get book value per share all you have to do is divide book value by the number of shares outstanding.

I recently reported on the results of my price-to-book ratio backtest. Shortly after running that backtest, I realized that many value investors probably actually prefer using price to tangible book value. The price to tangible book value ratio is simply the current price of the stock divided by the latest quarterly tangible book value per share. Tangible book value  is defined as book value minus goodwill and intangible assets.

In Brief The Cornerstone Growth Screen is an impressive growth screen which combines relative strength, earnings consistency and a price-to-sales value measure. Background  O'Shaughnessy wrote the seminal 1996 book quot;What Works on Wall Street”.

Jim Pyke submits:An old adage states that "retail is detail." Grocery stores face a challenging market place where they have large fixed costs and razor thin margins. The industry has slowly grown more concentrated with emergence of superstores (Wal-Mart) and a constant push towards ever greater scale to enhance purchasing power. The success of a grocery store is about being able to efficiently turnover goods, many of which are perishable, in a timely manner.

I use the Federal Reserve Economic Data (FRED) from the St. Louis Federal Reserve on almost a daily basis and for those of you that also access these data on a regular basis, you might be interested to know that there's now a free "FRED Add-In for Microsoft Excel" available here.

By Dan Hennessy:Buy and hold has gotten a bad name since the 2008 financial crisis and subsequent recession, but it is still a viable strategy for long-term investors with patience and the ability to pick the right stocks. Finding a financially strong, undervalued company with a durable competitive advantage in its industry, and a large dividend, makes a strong buy and hold candidate.

Brian Polino submits:It was only after traveling across the heartland of America that I recognized the true value of a durable competitive advantage. On my way to the Berkshire Hathaway (NYSE:BRK.A) Annual Meeting, it was hard not to see a Coca-Cola (NYSE:KO) distribution truck every time you scanned the road’s horizon.