Screening Stocks by RSI, Positive P/E, and Historical Dividend Payout

Summary

The proposed stock screen combines a technical condition with valuation and dividend criteria: select shares with RSI below 65, positive price-to-earnings ratios, and a dividend payout ratio above 25% for 2019. The accompanying rationale treats the RSI threshold as a way to avoid an overextended technical reading, positive P/E as a basic profitability or valuation filter, and the historical payout threshold as evidence of substantial distributions.

The article warns that a single year’s payout does not establish a stable dividend policy and that the screen omits other financial and market context. It suggests adding balance-sheet, valuation, profitability, industry, and market conditions. No backtest or performance results are provided. The sample Python reference also appears to compare recent percentage price change with the RSI threshold, rather than calculate RSI, so it may not implement the stated screening logic; this discrepancy should be resolved before relying on the code.

Key ideas

• The stated screen requires RSI below 65, positive P/E, and a 2019 payout ratio above 25%.
• A single year of high dividends does not demonstrate that a company will sustain its payouts.
• The article recommends considering additional balance-sheet, valuation, profitability, industry, and market factors.
• No historical performance test is presented, and the sample code appears to use price change where the text specifies RSI.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.