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U.S. dividend all-stars: 20 stocks with the biggest payouts Add to ...

Craig McGee is a senior consultant at Morningstar Canada.

What are we looking for?

The biggest dividend payers in the United States – a followup to last week’s screen for Canada’s top dividend stocks.

The screen

I scanned the CPMS U.S. equity database for the 20 stocks with the highest value of expected total dividends to be paid in the next four quarters and the following additional criteria:

– expected year-over-year dividend growth must be positive;

– each sector was limited to no more than two stocks.

Using CPMS, I back-tested the strategy to apply the same rules-based approach since Dec. 31, 1993 (a caveat – prior to 2005, the test did not include the positive dividend growth constraint). A portfolio of 20 stocks was equally weighted and reselected each year. Intrayear, any delisted stock would be replaced with one that met the above criteria.

More about Morningstar

Morningstar Inc. provides independent investment research in North America, Europe, Australia and Asia. Its research tool, Morningstar CPMS, provides quantitative North American equity research and portfolio analysis to institutional clients and financial advisers.

CPMS data cover more than 95 per cent of the investable North American stock market. With more than 110 equity and credit analysts, Morningstar has one of the largest independent institutional equity research teams in the world.

What we found

As in Canada, this strategy has lagged the market over the past year, generating a total return of 20 per cent versus 24.6 per cent for the S&P 500 Total Return Index.

For the full period covering more than 20 years, this fairly defensive approach would have posted an annualized return of 10.4 per cent while the benchmark came in at 9.4 per cent over the same time frame.

Investors are advised to do their own research before investing in any of the stocks shown here.

Leading U.S. dividend stocks

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