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DARS Update

Nov 01, 2017


We’re pleased to announce that the enhancement to DARS™ (Dividend Advantage Rating System) has been launched.


This change provides you with a more comprehensive analysis of 2,800+ stocks (dividend-paying and non-dividend-paying). The existing parameters used to rate stocks have remained the same. However, we have improved their calculations to better reflect your goals.


This upgrade demonstrates our commitment to serving dividend investors because it allows you to make informed investment decisions.


Why We Have Made These Changes


Our platform now monitors all U.S. listed dividend-paying stocks. This brings our total coverage to 2,500+ dividend-paying stocks. This increased coverage strengthens our analysis and enables you to compare significantly more stocks with the same trusted tools you’re familiar with.

In today’s low-yielding environment, as the search for safe, high-yielding assets intensifies, we feel a more sophisticated and in-depth analysis is necessary for you to make prudent portfolio decisions. We are committed to helping you achieve your retirement and income goals by giving you the tools and analyses to choose the right stocks for your portfolio.


A Summary of the Changes


  • Increased Rating Coverage
    Our DARS™ rating coverage has expanded from 1,800+ dividend-paying stocks to 2,800+ dividend-paying and non-dividend-paying stocks.
  • Now Rating Non-Dividend-Paying Stocks
    DARS now rates non-dividend paying stocks in addition to dividend-paying stocks. Stocks that have a higher likelihood of initiating a dividend are rated higher than stocks that are less likely.
    This allows dividend-paying investors to mix in a growth stock along with well-established income-paying stocks which can help diversify their portfolio.
  • Enhanced Calculation
    The data points within each of DARS™ five parameters now use a different calculation. This enhanced calculation will help you achieve your retirement and income goals faster. We have broken down each parameter below.
    • Dividend Uptrend – This parameter now uses the price-to-earnings (P/E) ratio to evaluate whether or not a stock’s dividend is likely to trend upward. If a stock is valued near, or slightly below the market average, research has shown that market expects the stock’s dividend to increase, thus rating it higher.
    • Overall Yield Attractiveness – If a stock’s yield is above or near the market average then it will now be rated higher within this parameter. Yields that are too low or too high are seen as a negative factor when calculating the rating for this parameter.
    • Relative Strength – This parameter now evaluates a stock’s % change from its 52-week-high number. The closer the stock is to its 52-week-high, the higher the relative strength rating a stock will receive.
    • Earnings Growth – This parameter now evaluates a stock’s current year’s expected earnings per share (EPS) and compare it to next year’s expected EPS. Stocks with single-digit growth estimates are given a higher rating than others, as our research has shown that modest earnings growth is a sign that well-established companies are likely to keep increasing their dividend over other companies.
    • Dividend Reliability – This parameter now rates stocks that have a healthy payout ratio that is higher than other stocks. A company that pays out close to half of its earnings as dividends and retains the other half of earnings has ample room to grow its business and pay out more dividends in the future. Such stocks are given a higher rank in the dividend reliability parameter.
  • Rating Brackets
    The rating brackets are as follows:
     

Bracket From To

Avoid

02.5

Neutral

2.63.5

Recommended

3.64.5

Highly Recommended

4.65
 

 


As always, we welcome your feedback and suggestions. You can reach us here.

Kind regards,

Dividend.com Team

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