4 Growth and Income Stocks Beating the Market

This screen will help you find value in a volatile market

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4 Growth and Income Stocks Beating the Market

When the stock market is surging, investors don’t seem to care much about dividends. That was certainly the case in 2013. After all, with the S&P 500 soaring nearly 30% last year, a 2% dividend yield seemed pretty measly.

But with increased volatility here in 2014 and a flat overall market, income has become more important for investors. This is one of the reasons why the stodgy, high-yielding utility sector is the best performer year-to-date.

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Dividends Matter

Historically, companies have paid out a little over half of their earnings in the form of dividends, while the stock market has averaged a dividend yield of 4.4%. However, just 32% of earnings are paid out in the form of dividends today, and the market yields a little more than 2%.

It’s no wonder why investors typically focus on price gains much more than income these days. But over the long run, dividends have actually contributed more than 40% of total stock market returns.

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And after a 5-year bull market in which the S&P 500 has surged over +175% and valuations have become a bit stretched, don’t be surprised to see dividends contribute a significant portion of total returns over the next several years.

Growth and Income at a Reasonable Price

With the increased focus on total return, investors should consider adding some growth and income stocks to their portfolio.

To find some top-performing growth and income stocks, I ran a screen in Research Wizard where I looked for stocks with the following criteria:

  • Dividend yield > 2%
  • Zacks Rank of 3 or better
  • Forward P/E below 18
  • Solid earnings growth projections
  • Growing dividend
  • Strong performance year-to-date vs. the S&P 500

Here are the top 4 names from the list:

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Article printed from InvestorPlace Media, http://investorplace.com/2014/04/growth-income-stocks-cube-pkg-alv-ggp/.

©2015 InvestorPlace Media, LLC

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