This veteran money manager has seen it all. And these 19 dividend stocks pass his rigorous quality screen right now.


Lewis Altfest’s time in the financial industry spans seven decades. It has some tips for investors who are not used to stock price movements.

Altfest founded Altfest Personal Wealth Management in 1983 after working as a general partner and research director at Lord Abbett & Co. Prior to that, he was an analyst for several companies, including Lehman Brothers.

It then modifies its methodology for a dividend stock screen to help investors overcome turbulent markets.

Since his escape to the country, Altfest, whose company manages about $ 1.5 billion for private clients, has received the following advice for long-term investors who may have difficulty waiting for better times through a bear market: “The bones come to the back deck looking for food. We’re not afraid of them. We knock on the back window and they run away. My advice to young people is not to be afraid of the bear stock market! It can be that the bear takes time to flee, but it always happens. “

When asked about the concerns of its customers this year, Altfest said that most “have not yet reached panic mode” and that it is usually newer customers who are most nervous about the current environment, in that rising interest rates have put pressure on bond stocks and valuations.

He noted that by creating cash balances and maintaining short-term bonds by the end of 2021, he positioned himself to take advantage of this year’s price falls.

He said, “We have stayed away from volatility,” which is reflected in the stock selection methodology below.

When asked for an example of an investment that has held up well this year, Altfest named Lazard GLIFX Global Listed Infrastructure Fund,
+ 0.12%.
Below is how it worked until June 28, with the S&P 500 SPX,
+ 0.21%
added as a reference (with reinvested dividends for both):

Set of facts

Altfest said that in the long run, he and his colleagues were interested in biotechnology, “which has been affected and has an optimistic future,” and international allocation, “particularly developing markets.” He mentioned the IBS iShares Biotechnology ETF,
+ 0.28%
and the Matthews Asia Innovators Fund MATFX,
-0.06%
as two broad vehicles that he and his team of investment managers have been using for extensive exposure to these areas of the market.

Control of US dividend shares

In January, Altfest said investors were “buying high.” The S&P 500 started the year with a price-to-earnings ratio of 21.5; the term P / E of the US benchmark index has declined 24% to 16.4 since then.

For many of Altfest’s customers, revenue is a primary goal. In recent years, this has led to a focus on stocks with attractive dividend yields. Even with the rise in interest rates this year, the yield on 10-year US Treasury bonds TMUBMUSD10Y,
3,131%
it is 3.17%, which is unattractive because the bonds do not have long-term growth potential of the shares.

With falling stock prices and taking into account a weakened economy, Altfest made some changes to its initial selection criteria recommended for dividend shares. It now suggests starting with a dividend yield of at least 3.5% (compared to its 3%) above, with estimates to increase sales and earnings by between 3% and 4% (below its range). previous from 4% to 5%).

It also wants to stay with a low volatility strategy, with a beta of 1 or less. Beta is a measure of price volatility over time. For this screen, a beta below 1 indicates that the stock price has been less volatile than the S&P 500 over the past year.

Here’s how we examined the S&P 500 for quality dividend stocks:

  • Beta of the last 12 months of 1 or less, compared to the price movement of the entire index: 324 companies.

  • Dividend yield of at least 3.5%: 64 companies.

  • Estimated earnings per share for 2024 will increase by at least 4% from 2023, according to consensus estimates by analysts surveyed by FactSet. Altfest suggested going this far because it would avoid distorting current year’s estimates of actual EPS results. This reduced the list to 45 companies.

  • Estimated sales for 2024 will increase by at least 4% from 2023, according to consensus estimates from analysts consulted by FactSet. Earnings and sales estimates were based on calendar years, not corporate fiscal years, which often do not match the calendar. This last filter reduced the list to 19 actions.

Here they are, sorted by dividend yield:

Company

Ticker

Dividend yield

Expected increase in EPA – 2024

Expected increase in sales – 2024

Vornado Realty Trust

A LA U
-1.12%

7.19%

43%

8%

Oneok Inc.

OKAY,
-0.23%

6.56%

5%

8%

Philip Morris International Inc.

PM,
-0.27%

4.88%

9%

6%

Walgreens Boots Alliance Inc.

WITH,
-0.68%

4.66%

6%

4%

International Business Machines Corp.

IBM,
-0.49%

4.65%

4%

5%

Pinnacle West Capital Corp.

PNW,
-0.68%

4.65%

6%

4%

Federal Realty Investment Trust

FRT,
-1.17%

4.35%

14%

7%

VF Corp.

VFC,
-2.04%

4.34%

10%

7%

Realty Income Corp.

o,
+ 0.35%

4.30%

7%

11%

Truist Financial Corp.

TFC,
-1.06%

3.97%

10%

5%

Kimco Realty Corp.

KIM,
-0.66%

3.93%

16%

5%

Bancorp of the USA

USB,
+ 0.18%

3.92%

7%

4%

Darden Restaurants Inc.

DRI,
-1.20%

3.92%

11%

6%

Southern Co.

TAN,
+ 0.45%

3.85%

9%

4%

Principal Financial Group Inc.

PFG,
-0.32%

3.76%

7%

5%

Cardinal Health Inc.

CAH,
+ 0.26%

3.68%

8%

5%

Digital Realty Trust Inc.

DLR,
-3.59%

3.63%

20%

7%

Morgan Stanley

MS,
+ 0.61%

3.58%

13%

4%

Sales Inc.

VTR,
+ 0.68%

3.52%

59%

7%

Source: FactSet

Click on the tickers to start your own search on any of the companies.

Click here for Tomi Kilgore’s detailed guide to the vast amount of free information on the MarketWatch budget page.

A value screen based on a limited number of factors only serves as a starting point for further research. If you’re interested in any of the actions on the list, you should learn more on your own about the companies ’business and long-term prospects, to form your own opinion.

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