Dividends and Select US stocks with lower volatility

We all invest in the stock markets to increase our wealth or make more money, then we can have options what we wish to do with the money. After 6 months of market activity the general market is up and that is a good thing. We know markets go up and they go down, but we are not sure when that happens. If you made gains, then you should consider looking at the volatility of your portfolio. In a recent article in the press, Emily Halverson-Duncan of Morningstar Research examined her data base of 2,000 plus names to find some lower volatility stocks. Her criteria was:

Stocks are ranked based on earnings-per-share or EPS variability (a measure of variability in the monthly EPS values across the latest 5 years, low values preferred).

Free cash flow yield which is a measure of profitability and high values are good.

5 year beta less than 1.1 (beta measures a company’s sensitivity relative to historical changes in the benchmark – using the S&P 500).

EPS variability in the lower half of its peers (as of the date of the chart the number is 13.1% or less).

Industry relative debt-to-equity ratio in the lower half of peers (the present number is 1.0 or less).

Market capitalization in the top 1/3 of peers (the present number is $6.9 billion or more).

Company                   Mkt Cap   Div         EPS           Industry Rel     FCF               5Yr

($bil)         Yield       Var %       D/E Ratio         Yield %         Beta

AGNC Invest               9.119       11.3       7.2               0.0                   19.1           0.2

Reinsurance Group   9.926          1.5       5.4               1.0                     14.2           0.7

AFLAC Inc                   42.350       1.9       5.2               0.6                     13.8             0.7

Henry Schein               10.310       0.0         2.0              0.8                       6.8             0.8

Infosys Tech                 46.260       2.3         1.6           0.0                       4.0             0.5

Medtronic PLC           131.580       2.2         1.9           1.0                      3.8           0.7

Amdocs                           8.735       1.8         2.6             0.0                       5.1           0.4

AT&T                           250.321       5.9         3.4           0.8                       6.7          0.6

Novo-Nordisk             120.284       2.4           3.0           0.1                     4.1           0.6

The other names on the list were Hartford Financial Services, Novartis, JM Smucker, Church & Dwight Co Inc, and CNA Financial

Linking to dividend paying stocks, list such as this one allows you to see there are many alternatives to purchase and you need to narrow the field. The tougher the criteria, the least likely we will lose money and when you invest, not losing money is a very good objective. If you invest in profitable stocks which pay dividends in the long term your wealth will increase.

There are more questions than answers, till the next time – to raising questions.

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