Iryna Drozd
BofA analysts published a screen with Russell 1000 (NYSEARCA:IWF) stocks with secure dividends that are not stretched.
In a Quantitative Profiles report, Strategist Savita Subramanian said that analysts “believe that we are now in a total return world in which the contribution of dividends to total market returns could be significantly higher than it was in the last decade, a period marked by falling cash yields and lofty price returns.”
BofA advises investors to seek out companies that have above-market and secure -- not stretched -- dividend yields.
According to analysts, Quintile 2 of the Russell 1000 (IWF) by trailing dividend yield could be a good first-pass screen. The list includes the second-highest tranche of dividend yielders in the index, and incorporates a “buy low, sell high” valuation discipline so that if prices rise faster than dividends, companies will migrate into Quintile 3, the report said.
This “guards against owning distressed companies that migrate into Quintile 1 (the highest dividend yield group) if prices fall ahead of potential dividend cuts.”
These are the top 20 Quintile 2 Russell 1000 (IWF) stocks, with their dividend yield, as of March:
- Essex Property Trust Inc. (ESS) - Dividend yield: 3.99%
- Alexandria Real Estate Equities Inc. (ARE) - Dividend yield: 3.98%
- WEC Energy Group Inc. (WEC) - Dividend yield: 3.98%
- Chevron Corp. (CVX) - Dividend yield: 3.97%
- Fifth Third Bancorp (FITB) - Dividend yield: 3.96%
- STAG Industrial Inc. (STAG) - Dividend yield: 3.96%
- American Electric Power Company Inc. (AEP) - Dividend yield: 3.96%
- Interpublic Group of Companies Inc. (IPG) - Dividend yield: 3.95%
- Xcel Energy Inc. (XEL) - Dividend yield: 3.95%
- Kimberly-Clarck Corp. (KMB) - Dividend yield: 3.90%
- Viatris Inc. (VTRS) - Dividend yield: 3.88%
- Invitation Homes Inc. (INVH) - Dividend yield: 3.87%
- NiSource Inc. (NI) - Dividend yield: 3.84%
- CNA Financial Corp. (CNA) - Dividend yield: 3.82%
- Alliant Energy Corp. (LNT) - Dividend yield: 3.79%
- Morgan Stanley (MS) - Dividend yield: 3.78%
- Citigroup Inc. (C) - Dividend yield: 3.75%
- AvalonBay Communities Inc. (AVB) - Dividend yield: 3.73%
- M&T Bank Corp. (MTB) - Dividend yield: 3.72%
- Consolidated Edison Inc. (ED) - Dividend yield: 3.72%
More on iShares Russell 1000 Growth ETF:
- IWF ETF: Solid Track Record, But Looks Overextended Now
- IWF: Price Isn't Everything; Favor Growth Over Value
- 10 option overwriting calls that can capture 7% upside - BofA
- These stocks could be at risk without a bond rally - Piper Sandler
- Seeking Alpha’s Quant Rating on iShares Russell 1000 Growth ETF