Category Archives: S&P 500 Dividend Aristocrats

Yet Another Reason to Pay Attention to Value Stock Models

2016 began with a sharp spike in volatility with investors concerned the bull cycle could be over.  Now is more than ever a great time to consider value stocks to remove risk in your stock portfolios.  I have been cautious for over a year now and have a 12-month period to show results versus my two benchmarks, the Vanguard Total Stock Market ETF (VTI) and the S&P 500 Dividend Aristocrats ETF (NOBL).  Since last March, the Value Portfolio has outperformed VTI by 15.4% and NOBL by 9.5%.  Click here to see the March 2016 picks for value stocks in the Value Portfolio.

Value Stocks

the Value Portfolio performance

Ranking the Dividend Champions

The Dividend Champions, created and maintained by David Fish is a list of dividend stocks that meet the same difficult criteria as the S&P 500 Dividend Aristocrats -25+ years of consecutive dividend payments- but includes stocks outside of the S&P 500.  In all, there are currently 105 dividend stocks on the list.  I apply a fundamental value ranking method using my econometric model fitted using the dividend aristocrats from 1992-2008.  For the full article, click here.

Revisiting the S&P 500 Dividend Aristocrats fundamental model

Due to the interest in my latest article on the S&P 500 Dividend Aristocrats (Finding Value in the Dividends Aristocrats List) and the discussion about backtesting, I thought I would share the empirical model I developed a few years back for forecasting total returns for The Value Portfolio (the 5 most undervalued stocks in the index).  To outline the importance of value, I also created a portfolio of the 5 most expensive – The Underperform Portfolio.  The results from 12 quarterly periods compared to the benchmark Dividend Aristocrats index outside of the model fitting period are shown in the chart.  The full model is provided in xls linked below.

Model Portfolio