Proprietary Toolkit

Absolute Strategy Research: Dividend Dynamos

Our Dividend Dynamo methodology was developed created to screen for stocks that are at a low risk of dividend cuts, and incorporate those stocks into an index that avoids sector bias.

We rank each stock on the following criteria: EPS growth; EPS volatility; interest cover; cash conversion; and case return on equity. These rankings are added together with equal weights to get the Dividend Dynamo score.

We then then take the best three in each ICB Industry to get the ASR Dividend Dynamos, or the worst three stock for the ASR Dividend Dilemma.

These screens are based on the ASR Europe 600, ASR Eurozone 500, ASR Global 1500, ASR US 500, ASR UK 350 and ASR Japan 300 stock lists. Constituents of these indexes are available upon request. Indices are rebalanced on the first day of each quarter.

Sample index performance is shown in the chart below.