New Stocks On Safest Dividend Yields Model Portfolio: July 2017

Photo Credit: Sean Welton (Flickr)

Five new stocks make our Safest Dividend Yield Model Portfolio this month, which was made available to members on July 21, 2017.

Recap from June’s Picks

Our Safest Dividend Yields Model Portfolio outperformed the S&P 500 last month. The Model Portfolio rose 1.8% on a price return basis and rose 2.5% on a total return basis. The S&P 500 rose 1.7% on a price return and total return basis. The best performing stocks in the portfolio were large cap stock Kohl’s Corporation (KSS), which was up 9%, and small cap stock, NVE Corporation (NVEC), which was up 9%. Overall, 10 out of the 20 Safest Dividend Yield stocks outperformed the S&P in June.

Since inception, this Model Portfolio is up 11% on a price return basis (S&P +14%) and 15% on a total return basis (S&P +16%).

The success of this Model Portfolio highlights the value of our Robo-Analyst technology, which scales our forensic accounting expertise (featured in Barron’s) across thousands of stocks.

This Model Portfolio only includes stocks that earn an Attractive or Very Attractive rating, have positive free cash flow and economic earnings, and offer a dividend yield greater than 3%. Companies with strong free cash flow provide higher quality and safer dividend yields because we know they have the cash to support the dividend. We think this portfolio provides a uniquely well-screened group of stocks that can help clients outperform.

New Stock Feature for July: TransAct Technologies (TACT: $9/share)

TransAct Technologies (TACT), a manufacturer of specialty printers and terminals, is one of the additions to our Safest Dividend Yields Model Portfolio in July.

Over the years, TACT has shown the ability to overcome challenging market conditions and recover from periods of lackluster profitability. After the 2008/2009 recession, TACT improved its after-tax profit (NOPAT) margin from -1% in 2009 to 6% in 2010. Again, TACT improved its NOPAT margin from 2% in 2014 to 7% in 2015 after undertaking cost-cutting initiatives. Since 2009, TACT has remained consistently profitable while improving its return on invested capital (ROIC) from -2% in 2009 to a top-quintile 15% over the last twelve months.

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Disclosure: David Trainer, Kyle Guske II, and Kenneth James receive no compensation to write about any specific stock, style, or theme.

Disclosure: David Trainer and Sam McBride receive no ...

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