Stock Selection by Dividend Yield, Moving-Average Trend, and Fund Flows

Summary

This stock screen combines a 2019 dividend measure above a stated threshold, a 20-day moving average above the 120-day average, and a ranking by capital intensity. The moving-average comparison is presented as a way to favor stocks whose shorter-term trend is stronger than their longer-term trend. Capital intensity, with turnover and volume ratio offered as possible measures, is meant to represent trading activity and investor attention. The dividend condition is intended to favor companies with substantial distributions.

The document explains the rationale and names possible extensions, including additional activity measures, other technical indicators, and profitability metrics such as return on equity or invested capital. It warns that activity data may be distorted and that both trend and dividend measures can be misleading. No backtest results or evidence of returns are provided, and the dividend measure’s definition is not fully clarified. The rules are therefore a proposed screening framework, not a validated strategy, and would require careful data definition and testing.

Key ideas

• The screen combines a historical dividend measure with a short-versus-long moving-average trend filter.
• Stocks are ordered by a capital-activity measure, for which turnover and volume ratio are suggested examples.
• The author proposes adding other technical and financial indicators to broaden the assessment.
• Activity, moving-average, and dividend data can be noisy or misleading.
• The document provides no performance results to validate the screening rules.

Tags

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