When I’m deciding which shares to buy or sell I always start by looking at the company’s rank on my unique defensive value stock screen.
The screen covers more than 200 FTSE All-Share companies, each with a ten-year unbroken record of dividend payments.
It is also used as the first step in deciding which shares to add to or remove from the model portfolio (the second step is a series of probing questions designed to find out if the company is a potential value trap and if it has any competitive advantages).
The stock screen ranks stocks by a combination of five factors:
- Growth Rate – How fast a company has grown over ten years
- Growth Quality – How consistently a company has grown over ten years
- Profitability – How profitable a company has been over ten years
- PE10 ratio – The share price to ten-year average earnings ratio
- PD10 ratio – The share price to ten-year average dividend ratio
If you want to find out exactly how each of those factors is calculated have a look at the free resources page. There are worksheets and spreadsheets which enable you to calculate each factor for any company by hand. It also includes a worksheet of the company analysis questions mentioned above.
Interactive online stock screen
Subscribers also have access to an interactive online version of the stock screen.
With the online screen you can sort the list of over 200 companies by dividend yield, Growth Rate, Profitability or any of the five factors above.
You can also restrict the list by selecting those shares that have – for example – dividend yields above 4%, Growth Rates above 5% and Profitability above 15%.
Once you’ve sorted and selected the stocks to your personal criteria you can then download the underlying data to a spreadsheet for further analysis.
Take the next step
To learn more about defensive value investing, download these free resources and subscribe to the blog below.