Screening for Stocks With High Relative Dividend Yields

by Charles Rotblut, CFA

Screening For Stocks With High Relative Dividend Yields Splash image

Many respondents to a July AAII survey said they were favoring dividend-paying stocks over pure growth or value stocks. The reasons are not surprising. The stream of income offered by dividends provides some comfort in volatile market conditions. Furthermore, Treasury yields have fallen to low levels. During July and August, yields on the 10-year note were below 3%. Dividend-paying stocks can offer comparable yields with the possibility of dividend growth and capital appreciation.

Not all dividends are created equal, however. Many companies have either cut or eliminated their dividends since 2007. Therefore, it is important that investors pay attention to how committed management has been to ensuring dividends are paid and whether the size of the dividend ha

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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at


R from Maine posted over 3 years ago:

Good stuff. Been hoping to get into dividend paying shares that seem pretty reliable instead of hoping that one of these days interest rates will rise again. We have idle cash available and will use this information.
Thank you.

Patricia from New York posted over 3 years ago:

If the high dividend stock was in my Roth account, tax legislation
wouldn't have an impact, right?

Edward from Utah posted over 3 years ago:

Thanks for this article and screening of high relative dividend stocks. I have been thinking about this topic actively for over a year and never quite gained a sense of confidence in choosing a safe stock. My lifetime experience with any high yielding investment has been, watch out, it's too good to be true, BOHICA. BP was one of my considerations just before the Gulf of Mexico disaster. This approach appears to reduce the risk and narrow the research field.
ROTH IRA income should be tax free baring early withdrawals.

Jim from California posted over 3 years ago:

Patricia right

G. ed from California posted over 3 years ago:

most company's drips r now handled out of company and IF ONE IS NOT SPOT-ON VGILANT excessive costs can be incurred.

Richard from Florida posted over 3 years ago:

Great article and idea for a stock screen. It is also important to note that the dividend yield you receive is based on the price you paid for the stock. In other words, as stock prices and dividend amounts-paid change, your personal dividend yield may no longer match the reported current dividend yield. So trading out of your current dividend paying stock for another with a higher reported current dividend yield may not be a wise decision.

Charles Rotblut from Illinois posted over 3 years ago:

Any changes in dividend taxes may affect sentiment towards dividend stocks. In tax-deferred account (e.g., a traditional or Roth IRA), you do not pay incur taxes on dividends received, but the value of your portfolio will be influenced by whether dividend stocks rise or fall.

Obviously, any change in tax laws will impact what you pay on IRA withdrawals and Roth IRA conversions.

Jerome from Arizona posted over 3 years ago:

These screens are good and, as you say, a starting point. Personally I favor closed end funds, usually traded as any stock on the New York Stock Exchange, such as those managed by Cohen & Steers, John Hancock, ING, and other highly professional managers. This way I can get higher yields, with leverage if I so choose, and the benefit of having professionals do the buying and selling of the portfolio held by the fund. Also, in my mix, are some preferred stocks, mostly issued by financial and real estate oriented companys, that pay fixed quarterly dividends and yield upwards of 8%. Maybe the writers of these articles think this type of investing is more (or too) risky, but it has worked well for me.

Raymond from Colorado posted over 3 years ago:

Good article, was wondering if there are any such investment vehicles in the reit are, and is there such a thing as a prefered reit,whether it be via a mutual fund or etf?

Melvin from California posted over 3 years ago:

Where do I find the HIGH HIGH Risk dividends ????

Mike from California posted over 3 years ago:

In addition to seeking high-yield dividend stocks, you can also increase the yield by writing call options against them each month. Free tutorial on covered calls here:

Leon from Texas posted over 3 years ago:

Great article and it was what I am presently looking for. Is this Screen Model presently available?

If so where and if not when?


Robert from Pennsylvania posted over 3 years ago:

VOD yield is now 3.5% per morningstar, vod pays div semiaunualy. vod recent history show a low div in nov & a higher div in June. Combined for only $1 .30. for 2010. Even at a low price in July. ex $23.25 yield would be 5.6%. I have seen several div yields posted at 7% & several in 3% range in recent various publications from different publications. What is correct??

D. from Maryland posted over 3 years ago:

Larry Swedroe seems to be firmly of the opinion that dividend investing is neither fish nor fowl; that you should make a clear separation between value stocks or bonds to optimize your risk premium. How do dividend investment fans respond to this?

Andrew from Florida posted over 2 years ago:

Look at Canadian Companies paying dividends in Canadian Dollars. Boosts yield for Americans. Look at MLP . Higher yields.

Hardave from New Jersey posted over 2 years ago:

I am surprised that the author made such a basic mistake. VOD pays dividends twice a year and not quarterly making the effective yield under 3.5% at todays price.

Missed were two companies in the same telecom space, namely AT&T and Verizon. Both with better than 5% dividend yield at todays stock price. I purchased AT&T stock in March 2011, the yield at that time was 6%.

Nash from Georgia posted over 2 years ago:

I think dividend stocks are going to grow in popular in the future. Any comment? I would appreciate more help from AAII in this area.

Martin from Arizona posted over 2 years ago:

I have many DRiPS, but Computershare, BNYMellon, etc. charge too much for the joy of owning them.

Peter from Ohio posted over 2 years ago:

I took my Glaxo Smith Kline stock out of the DRIP because it charged $15 quarterly. I put the stock in my Schwab account. No fees, automatic dividend reinvestment. GSK pays 5.14% annually in quarterly payments.

Rosmary from Illinois posted over 2 years ago:

This article has been very helpful in my
research as a beginning investor. Thank you,

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