Recently, I wrote an article about the level of the FTSE 100 and the current bull market we are in.
I noted that while the FTSE 100 is hovering around its all-time highs, many dividend stocks are well off their 52-week highs.
Today, in the ‘Screen of the Week,’ I thought it would be interesting to take a look at the FTSE 1o0 dividend stocks that have performed strongly over the last twelve months and that are trading near their 52-week highs.
Momentum dividend screen
I’ve screened the market for dividend stocks that meet the following criteria:
- FTSE 100 stocks
- Dividend yield over 3.5%
- A share price gain of 15% or more in the last year
- Less than 5% off 52-week high.
The results are displayed below. As you can see, there’s not many stocks with yields over 3.5%, that meet that criteria. Legal & General makes the list though, and that’s a stock I’ve covered quite a bit recently.
If I tweak the last criteria to less than 10% off the high 52-week high, more stocks show up on the screen.
That screen throws up an interesting list of names. We can see that HSBC and Royal Dutch Shell A are both in there (Royal Dutch Shell B showed a return of 13.2% so missed out). With those three companies making up around 17% of the FTSE 100, that explains a lot of the index’s recent strength. Quite a few housebuilders make that list.
Legal & General is the only stock I own from those two screens (I do have a position in Shell B).
One momentum dividend stock that looks interesting to me is wealth manager St James’s Place. It’s not a cheap stock (forward P/E of 28.7), nor does it have a super high yield (prospective yield 3.6%). But what the stock does have, is a very impressive dividend growth history. In the last five years, the payout has been increased from 8p per share to 33p per share. Analysts expect 43p and 47.3p per share this year and next. The business generates significant free cash flow, which comfortably covers the dividend payments.
I won’t be buying yet, however, it’s a stock I’ll be keeping a close eye on. I like the dividend growth potential here.
Disclosure: Edward Sheldon, CFA owns shares in Legal & General Group and Royal Dutch Shell B at the time of writing.
This article is provided for general information only and is not intended to be investment advice. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.