Skip to main content

What are we looking for?

Attractively valued U.S. securities generating earnings per share and free cash flow growth that are strong enough to deliver sustainable dividends and dividend growth.

The screen

We screen for companies providing a sustainable and consistent income stream with the potential to grow dividends while maintaining the versatility needed to invest in their business through production expansion, developing new products, or reducing debt. Our goal is not only to find stocks paying attractive yields, but ones capable of growing their dividend while maintaining or reducing their payout ratios.

Our screen is based on the following criteria:

  • Price-to-earnings ratio less than the S&P 500 (the index’s ratio is 23.3);
  • Dividend yield greater than the S&P 500 (the index’s yield is 2.2 per cent);
  • Projected one-year dividend growth greater than or equal to the S&P 500 (the index’s forecasted, market-cap-weighted dividend growth rate is 1.6 per cent);
  • Free cash flow yield must be greater than dividend yield (in other words, operating cash flows after accounting for capital expenditures are greater than the amount needed to sustain current dividends);
  • Projected one-year earnings growth must be greater than projected one-year dividend growth.

More about Thomson Reuters

Thomson Reuters delivers trusted news and intelligent information to more than one billion people in 140 countries every day. Our content, software and technology support the way professionals work in a rapidly changing, ever more complex world. Thomson Reuters Eikon is the platform used by financial and corporate clients to access top research, portfolio analytics, charting and screening for every asset class.

What did we find?

Results have been limited to securities with a market cap greater than $1-billion (U.S.). The screen highlights companies that have met the above criteria, ranked by market cap, with Altria Group Inc., Medtronic PLC and HP Inc. leading the pack.

This commentary does not provide individualized advice or recommendations for any specific subscriber or portfolio. Investors should conduct further research before investing.

Khaled Eniba works in the financial and risk unit of Thomson Reuters and specializes in banking and research.

Select U.S. securities

CompanyTickerMarket Cap ($Mil U.S.)P/EFree Cash Flow YieldProjected Earnings GrowthDividend YieldProjected Dividend Growth
Altria Group Inc.MO-N 136,722 9.07.9%8.4%3.7%5.3%
Medtronic PLCMDT-N 109,999 22.33.8%3.8%2.3%3.5%
HP Inc.HPQ-N 35,576 14.44.5%9.7%2.6%5.2%
SunTrust Banks Inc.STI-N 30,761 16.65.3%12.8%2.5%12.3%
Principal Financial Group Inc.PFG-N 20,655 11.76.3%14.7%2.7%3.0%
Omnicom Group Inc.OMC-N 17,161 14.85.1%7.1%3.3%2.0%
KLA-Tencor Corp.KLAC-Q 16,294 15.94.2%20.5%2.3%4.8%
Huntington Bancshares Inc.HBAN-Q 15,803 17.64.4%32.7%3.0%12.3%
Eastman Chemical Co.EMN-N 13,339 13.54.6%4.3%2.4%2.4%
Hasbro Inc.HAS-Q 11,418 19.52.9%12.1%2.5%4.0%
Williams-Sonoma Inc.WSM-N 4,377 14.73.4%3.2%2.9%1.6%
First Hawaiian Inc.FHB-Q 4,136 18.13.8%5.0%3.0%2.3%
Legg Mason Inc.LM-N 3,718 15.86.8%28.6%2.8%20.5%
Fulton Financial Corp.FULT-Q 3,123 17.43.5%14.0%2.4%4.8%
First Interstate BancSystem Inc.FIBK-Q 2,222 19.72.5%10.8%2.4%2.1%
Provident Financial Services Inc.PFS-N 1,796 17.93.2%12.1%3.0%2.4%
First Financial BancorpFFBC-Q 1,694 17.83.5%9.1%2.5%2.4%
Union Bankshares Corp.UBSH-Q 1,565 19.93.9%2.9%2.3%1.7%
Boston Private Financial Holdings Inc.BPFH-Q 1,312 19.73.2%3.8%2.8%2.3%

Source: Thomson Reuters Eikon

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Latest Videos