U.S.-listed large- and mid-cap stocks indicating below average valuations and above average yields relative to the broad S&P 500 index.It is impossible to know whether we will retest the S&P 500′s record high on Jan. 4 any time soon. Despite the recent short-term rally, a long-term bear market is quite possible. Regardless, today we’re looking for U.S. names indicating attractive valuations and income metrics that can weather current market volatility.
We begin by setting a minimum market capitalization threshold of US$5-billion. We wish to focus on larger, more established companies in the U.S. market owing to their inherent quality and stability.We will select only companies with dividend yields of 2.5 per cent or more, which tops the 2 per cent yield currently indicated for the S&P 500.
In order to avoid companies that are highly leveraged in a rising rate environment, we screened for companies that are indicating a debt-to-equity ratio that is less than one. The higher the ratio, the more leveraged the company is.