Saturday, December 13, 2008

Stock Screen: Low-Beta Dividend Stocks

After nursing my wounds from recent dividend cuts, I thought a screen of Low-Beta stocks is what the Dividend Dr. would recommend. BusinessWeek has a screen of Low-Beta stocks by By Beth Piskora of S&P. I will remove the non-dividend stocks from the screen. Stock Screen: Low-Beta Beauties

S&P's latest list finds top-ranked stocks that tend to be less volatile than the broader market. Among them: PepsiCo, and Wal-Mart.

The risk metric known as beta can be a useful investment criterion during these times of market volatility.

An issue with a beta of 1.5, for example, tends to move 50% more than the total market in the same direction. An issue with a beta of 0.5 tends to move 50% less. If a stock or stock fund moved exactly as the market moved, it would have a beta of 1.0. Thus, high beta is typical of a volatile stock, while a low beta is typical of a stock that moves less than the market as a whole. A stock with a negative beta moves in the direction opposite to that of the market. With a beta of -1.0, a stock has the same volatility as the market, but tends to rise when the market falls, and vice versa.

Stock fund betas are calculated once a month using 36 months of return data.

Considering the overall market's performance over the past three years, we screened for four- and five-STARS stocks with negative betas (suggesting inverse performance) or a positive beta of 0.25 or lower.

Company/S&P STARS Rank
Abbott Laboratories (ABT)/5 STARS
Associated Banc-Corp (ASBC)/4 STARS
BB&T Corp. (BBT)/4 STARS
General Mills (GIS)/5 STARS
Kinder Morgan Energy (KMP)/5 STARS
NuStar Energy (NS)/4 STARS
Owens & Minor (OMI)/4 STARS
PepsiCo (PEP)/4 STARS
Southwest Airlines (LUV)/4 STARS
Wal-Mart Stores (WMT)/5 STARS
Wells Fargo (WFC)/4 STARS
Zions Bancorporation (ZION)/4 STARS

This article was written by The Div Guy. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.


  1. Associated Banc-Corp (ASBC) is an interesting stock. I will post a stock analysis on it Monday.

    Best Wishes,

  2. I would be interested in seeing more about ASBC although I have enough finance stocks at this time.


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