Only these five dividend stocks made the cut in a ‘safer and better’ screen

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The companies had to reach yield and sales hurdles.

In May 2019, two veteran money managers shared their philosophy with MarketWatch readers that investors shouldn’t be overly focused on the highest dividend yields when selecting stocks for income.

A total-return focus Loewengart believes that a good approach for income-seeking investors is to focus on total return rather than dividend yield. If you are invested in a fund that tracks the S&P 500 Index SPX, -0.15%, such as the Vanguard 500 Index Fund VFIAX, -0.15% or the SPDR S&P 500 ETF SPY, -0.15%, your current yield is 1.60%. If you were to withdraw 5% a year from your index-fund account, you wouldn’t need much additional growth to keep your balance from shrinking.

Loewengart agrees that “value can be appropriate at this time,” because of this year’s outperformance in growth-oriented sectors. But he stressed that he was “not going to make any prediction” of how well value or growth strategies might perform. • Sales per share increases of at least 4% over the past 12 months — a company may have diluted its shares by issuing more to raise money to weather a crisis, or to make acquisitions or for other corporate purposes. This will reduce sales per share: five companies.

 

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