Every once in a while, when not writing about equities, I, too, like to look at “top stock” lists. The thing is, “top stocks” is an extremely subjective term. Some people like massive returns. Others want financial performance. However, for me and my long-term readers, that category will almost certainly include the dividend element. Having been through several downturns, the one thing that prevents me (and others) from hitting the sell button is that a dividend payment is around the corner.
So, today, I set myself the goal of finding the best dividend stocks using buy ratings and buy signals. Here’s how.
How I Came Up With the Following Stocks
Like many of my analyses, I begin with Barchart’s Stock Screener Tool. This time, however, I tightened the search criteria as much as I could to get the top dividend stocks with buy ratings and signals.
First, I used the following common filters and then cranked up their values:
- Analyst rating: Set to 4.5 to 5 (Strong Buy). This list only includes the best performers with the highest average scores.
- Number of analysts: Set to 12 or more analyst coverages. Usually, I’m happy with setting it to 8 or more, but again, I’m aiming for the top, so I set this to 12 or more firms covering the stocks. That way, the results can be considered more reliable.
- Annual dividend yield (%): As usual, I left this blank but included it in the filters so I can sort using it.
Then, I used several exclusive filters based on the Barchart Opinion, the website’s proprietary analysis platform that uses thirteen technical analysis techniques to predict a stock’s potential direction and momentum in the short, medium, and long term. Here are the filters I used:
- Short-term Buy/Sell/Hold Signal: Set to buy.
- Medium-term Buy/Sell/Hold Signal: Set to buy.
- Long-term Buy/Sell/Hold Signal: Set to buy.
- Overall Opinion Strength: Set to Maximum and Top 1%. Opinion strength indicates the stock’s potential momentum, which may predict how high its price could go. The “maximum” and “top 1%” categories allow me to filter for stocks that belong to the upper crust of Barchart Opinion results compared to the rest of the market.
- Overall Opinion Direction: Set to Strongest to Top 1%. On the other hand, the Opinion direction gives an idea of how likely the stock will continue moving in its current direction.
Using this set of filters, the results will have strong buy ratings from analysts, positive buy signals across all time frames, and the highest Opinion strength and direction scores in the entire stock market.
After running the scan, 14 companies were on the list.
I then arranged the list from highest to lowest dividend yield.
Oh, but I’m not done. Buy ratings and signals aren’t enough; I want my dividends. So, I added one more check that I had to complete manually:
- Consistent dividend payouts: The company must have consistently paid dividends for the last four years, with a minimum of four payouts for quarterly schedules or two payouts for semi-annual schedules.
After this last manual round of checks, Western Alliance Bancorp didn’t make the cut.
And so, without further ado, here are the results:
Essential Properties Realty Trust (EPRT)
Overall Opinion Strength: Top 1%
Overall Opinion Direction: Strongest
Essential Properties Realty Trust is a REIT that specializes in single-tenant properties. These properties are then leased to experience- or service-based businesses. Think restaurants, small to medium-sized entertainment and amusement businesses, car wash joints, auto repairs, health clinics, and more. They’re perhaps not as glamorous as a casino on the Las Vegas Strip, but Essential Properties’ portfolio consists of businesses you can find everywhere in America.
In fact, the company boasts over 1,900 properties in 48 out of 50 states, with over 99.9% of their properties leased.
EPRT stock had an excellent run in the past few days, inking a new 52-week high of $37.78. Based on Barchart Opinion, that bull run is bound to continue, and 13 analysts rate the stock a strong buy with an average score of 4.62.
EPRT has a quarterly dividend payout schedule, with the last going for 29 cents per share. This translates to a $1.16 annual rate or a 3.81% yield.
Baker Hughes Company (BKR)
Overall Opinion Strength: Maximum
Overall Opinion Direction: Top 1%
Baker Hughes Co. is an oilfield service provider offering equipment and digital services to companies worldwide. It also offers an extensive list of products and services for green energy outfits, making it a potentially attractive investment for environmentally conscious investors.
Baker Hughes’ stock price has just broken through with a new 52-week high in the last trading session, and experts and Barchart Opinion anticipate that this bull run will continue. The company also has many eyes on it—21 analysts, to be exact—and a majority of them have good things to say. BKR stock has a 4.67 average score, ranking it a strong buy.
Baker Hughes also has a reliable dividend policy, with the latest payout at 21 cents per share, or 84 cents annually. This translates to a respectable 2.23% dividend yield. Even better news: the company has raised payouts annually for the last three years. With its strong buy rating and even stronger buy signals, the projected dividend increase is just the icing on the cake.
Reinsurance Group of America (RGA)
Overall Opinion Strength: Maximum
Overall Opinion Direction: Strongest
As one of the world's largest health and life reinsurance companies, Reinsurance Group of America has a lot going for it. Even a quick look at its price chart is enough of a signal to know something is going well.
Dividend-wise, the company is no slouch, either. It pays 85 cents per share, translating to $3.40 annually or a 1.53% yield, and has a strong dividend payment history, making it perfect for income investors. The company’s current performance has also earned goodwill on Wall Street, with 13 analysts rating RGA stock an average of 4.54.
Final Thoughts
You can’t go wrong with dividend stocks with excellent buy signals and strong buy ratings from analysts. Of course, this investment thesis might not work for everyone, but these picks are top-shelf for investors with the same mindset as me.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
