U.S. dividend growth screen uncovers strength in the energy sector


Gary Christie


December 4, 2023



Min Read

What are we looking for?

Large-cap stocks listed in the United States exhibiting above-average dividend growth and yield that are trading near 52-week highs.

The screen

Using Trading Central Strategy Builder, We started our screen by establishing a minimum market capitalization threshold of US$10-billion, considering the stability, liquidity, and likelihood of consistent dividends linked to well-established and larger companies.

Next, we set a minimum dividend yield requirement of 2.5 per cent, which is above the 1.53-per-cent average of the S&P 500 index.

Continuing our focus on dividend criteria, we established a minimum requirement of a 15 per cent or higher five-year average-dividend-growth rate to secure a consistent income flow and provide protection against inflation.

Finally, we homed in on stocks that are trading within 15 per cent of their most recent 52-week highs, which presents a potential for momentum breakouts to the upside.

We have also included year-to-date, sector and industry, and one-year price performance for your reference.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.

What we found

Stocks with strong dividend growth and price momentum

Our screener ranks the list based on all performance and revenue criteria. Interestingly, the majority of the results are in the oil and gas sector.

Topping our list is Diamondback Energy Inc.

FANG-Q, an independent oil and gas producer in the U.S. The stock has the second-lowest P/E ratio on our list at 8.72 and the second-highest five-year average dividend growth rate on our list at 89.8 per cent. The stock is trading within 10 per cent of its most recent 52-week high set in October.

Global investment firm Goldman Sachs has the largest market cap on our list at US$110.9-billion. The stock is indicating a dividend yield of 3.23 per cent, a five-year average dividend growth rate of 26.42 per cent and has rebounded more than 18 per cent off its Oct. 27 low.

Independent energy exploration and production company Pioneer Natural Resources Co.

PXD-N, has the highest dividend yield and five-year average dividend growth rate on our list at 6.07 per cent and 125.33 per cent, respectively.

Canadian Natural Resources Ltd.

CNQ-N,  made the list owing to an above-average dividend yield of 4.35 per cent and a five-year average dividend growth rate of 21.41 per cent. The stock price is within about 2.9 per cent of its Nov. 3 record high, and has gained 19.4 per cent year-to-date.

Trading Central Strategy Builder provides a back-testing capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described has a 16-per-cent annualized total return compared with 11 per cent for S&P’s S&P 100 index.

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

Gary Christie is head of North American research at Trading Central in Ottawa.

Gary Christie

Head of North American Research
Gary has over 15 years in financial markets. Prior to joining TC, he served as an equity & derivatives specialist with TD Bank and Bank of America. Gary is regularly quoted in Bloomberg News, conducts many education and market outlook webinars for investment institutions all over the world and has been a guest speaker at the New York Traders Expo.
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