OCTOBER 16, 2006



Stock Screens

By Michael Kaye, CFA


Eight High-Quality Dividend Plays

S&P points out that quality does count. They screened for stability, growth, and dividends to provide this list of superior issues


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From Standard & Poor's Equity Research
In bull or bear markets, quality counts. Investors would do well to consider adding to their portfolios issues that have demonstrated superior earnings and dividend performance over time.


In this week's screen, we searched for big-cap names that fit the quality bill. We searched for S&P 500 components ranked 4 STARS (buy) or 5 STARS (strong buy) by Standard & Poor's Equity Research, meaning they are expected by S&P analysts to outperform the total return of the S&P 500 index over the coming 12 months, with the shares rising in price on an absolute basis.

Next, we looked for those issues that had a dividend yield greater than 2.50% and have raised their dividend at least 5% in each of the past five years.

In addition, each issue had to carry an S&P Quality Ranking of at least A-. S&P's Quality Rankings are designed to capsulate the nature of a company's growth and stability of earnings and dividends in a single symbol. The process also takes into consideration certain adjustments and modifications deemed desirable in establishing such rankings.

The final score for each stock is measured against a scoring matrix determined by analysis of the scores of a large and representative sample of stocks.

When we ran the screen, these eight names emerged:

CompanyS&P Quality RankS&P STARS Rank
Abbott Labs (ABT)A4
Altria Group (MO)A+5
Bank of America (BAC)A-5
BB&T Corp (BBT)A-4
Citigroup (C)A+5
General Electric (GE)A+4
Pfizer (PFE)A-5
Synovus Financial (SNV)A+4



Kaye, an analyst for Standard & Poor's Portfolio Services, is the author of The Standard & Poor's Guide to Selecting Stocks


All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report.
Standard & Poor's Regulatory Disclosure

Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
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