Sunday, August 13

Week 319 - A-rated Russell 1000 Companies With Tangible Book Value That Pay A "Good and Growing" Dividend

Last week, we surveyed A-rated companies in the 65-stock Dow Jones Composite Index with positive Tangible Book Value. It turned out there are 9 such companies for your Watch List. These 9 stocks constitute the latest version of our Growing Perpetuity Index (see Week 261 for background). This week, we survey all other companies in the Russell 1000 Index that pay a “good and growing” dividend and meet those requirements. There are 11 such companies, bringing the total number to 20.

Our Benchmark for companies that pay a “good and growing” dividend is the Vanguard High Dividend Yield ETF (VYM at Line 16 in the Table). That fund represents a subset of the Russell 1000 Index of the largest publicly-traded US companies which pay at least as high a dividend yield as the average for the full set. As it happens, all of the companies in the subset that have A ratings from S&P on their bonds and stocks are Dividend Achievers

Bottom Line: Our blog is centered on the idea that stock-picking can be a safe and effective way to save for retirement. These 20 companies in the Russell 1000 Index (including the 9 from last week) represent our best effort to create a concise “Watch List” for stock-pickers. But be aware: A safer and more efficient approach is to invest in the Vanguard High Dividend Yield ETF (VYM). Then you won’t be forced (through painful experience) to learn about economics.

Risk Rating: 6 (where 10-Yr Treasury Notes = 1, S&P 500 Index = 5, and gold = 10)

Full Disclosure: I own shares of HRL.

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