Rose’s Income Garden Inflation Fighting Investing Winners

mario31

Objectives of the RIG

RIG performed well, equal value and a return of 5.1%, due to targets set long ago, as well as diversification, value buying, positive earnings and dividend growth. Chasing 9-10% dividend yield isn’t easy, but combined with a rising dividend growth rate, it is possible to succeed with that of total return. A metric that some may or may not know is the Chowder # which is used to select high quality dividend paying stocks.

CHOWDER # = 5-year dividend growth rate + dividend yield

The 5-year dividend growth rate/5DGR

It is common to use 5 years of dividend growth = 5 years DGR/ “5DGR” to measure the success of any investment in collecting dividends. The dividend yield of the S&P 500 or SPY is currently 1.75%, which is also close to its 5DGR. To beat this current SPY yield with a 50% advantage would require a dividend yield of 2.6%. In many articles, like this one explaining the Chowder # rule, a rate of 3% is used, which I will also use here. Dividend increases for 5 years can be found easily at the subscription service I use from Chuck Carnevale called FASTgraphs. Alternatively, one could go to each stock investor’s website that lists dividends and increases can be determined using that information there. This might be the hardest stat to find, but it is an important and very valuable stat to know.

Dividend yield

The current annual dividend divided by the share price gives its yield. Pretty simple and easy to find and use.

So add the 5DGR + the dividend yield and you get a # , called here the Chowder #. It is used to determine relative investment strength. This number is actually used primarily for buying, but it can be a measure of the stock’s ongoing performance year after year.

C# levels

There are 3 C# levels that cover most investable stocks. The higher numbers are certainly and mainly based on the dividend yield, while the lower number and the 3rd level number relate to certain stocks in the sector.

#15

When the yield is below 3% (or currently, as mentioned earlier, 2.6%), this figure is mostly used for growth and low-yielding stocks.

#12

This is used when the yield is above 3% (currently 2.6%).

#8

The stocks found here are generally strong, safe, high-yielding dividend-payers that don’t depend much on price appreciation, but more on a solid dividend yield. Utilities is considered a defensive investment sector and definitely gets this lower #. Telecoms, some RICs, and MLPs are also considered to be in this category, as they are yield winners, but generally do not offer larger dividend increases.

The full rating for all 82 RIG stocks was posted on the Macro Trading Factory service yesterday, but I want to share some of the winners with you:

#15

2022

5 years

VS#

Pass

Teleprinter

Company Name

Pr/Sh

Yield

RDG

VS#

(FCM)

FMC Corp.

126.57

1.7%

33.2

35

15-Y

(MY)

MasterCard

317.43

0.6%

18.5

19.1

15-Y

#12

Company

November 7

2022

5 years

VS#

Pass

Teleprinter

Last name

Pr/Sh

Yield

RDG

VS#

(PSTN)

British American Tobacco

38.73

7.7%

seven

14.7

12-Y

(HD)

Home deposit

288.06

2.6%

19.4

22.1

12-Y

#8

Company

November 7

2022

5 years

VS#

Pass

Teleprinter

Last name

Pr/Sh

Yield

RDG

VS#

(MO)

Altria

45.29

8.0%

8.5

16.5

8-Y

(VOD)

Vodafone

11.99

8.3%

0

8.1

8-Y

High-yielding stocks, of which there are many, are also considered winners using the Chowder# method.

Conclusion/Summary

In some cases, one could argue that a C# of 10 might be enough for success with inflationary averages and not expecting any growth. It should be up to each individual to determine their own needs and how to use the actual number. 33 RIG stocks qualified for purchase using this method/criteria for the Chowder number. Additionally, 14 high-yielding stocks passed just for yield. It is extremely informative and useful and due diligence using other methods and especially income should be the final measure to determine success.

Good investment to all!

Macro Trading Factory is a macro-focused service run by a team of experienced investment managers.

The service offers two portfolios: “Funds Macro Portfolio” and “Rose’s Income Garden”; both aim to outperform the SPY on a risk-adjusted, relaxed basis.

Suitable for those who have little time/knowledge/inclination to manage a portfolio on their own and/or wish to gain exposure to the market in a simple, yet more risk-based (less volatile) way.

Each of our portfolios, covering all sectors, offers you a simple solution that is easy to understand and execute.

About Catherine Wilson

Check Also

First Trust Tactical High Yield ETF (NASDAQ:HYLS) Sees Sharp Drop in Short-Term Interest

The First Trust Tactical High Yield ETF (NASDAQ:HYLS – Get Rating) saw a sharp decline …