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Several subscribers inquired about the approach I used to discover high quality, high yield tobacco stocks that I invested in, and so this week, I aim to demonstrate the process.

While you're at liberty to utilize the screener of your preference, I'll illustrate my utilization of the Quant Investing stock screener as it aligns with my personal investment methodology.

Determine the sector

My initial step involved choosing the specific industry sector of interest, in this instance, the tobacco sector, to compile a list of prospective companies.

You have the flexibility to select one or multiple sectors, depending on the kind of companies you are interested in.

Choose the output columns

With high yield ideas in mind, I opted for the following output columns:

• Shareholder Yield – Superior to Dividend Yield when pursuing high yield prospects
• FCF Yield – To determine sustainability of high yield over time
• Dividend Yield – To assess the amount of cash returns in the present
• Country – Vital to evaluate withholding tax implications. For instance, the UK and Hong Kong have zero withholding taxes.

(Shareholder Yield is also the ratio we use to generate ideas for the Shareholder Yield Letter)

Results from the screener

Here's what the sorted by Shareholder Yield output looks like:

Source: Quant Investing stock screener

A few insights on the list:

• The company with the highest yield is located in South Korea. Even though it distributed a 6% dividend, it also bought back more than 6% of its shares, resulting in a Shareholder Yield exceeding 12%.
• British American Tobacco appears enticing with a Dividend Yield surpassing 8%. It seems sustainable and may have potential for growth, considering its FCF Yield stands at over 9%!
• Altria’s FCF Yield is lower than its Dividend Yield, indicating that it may need to incur debt to fulfill a portion of its dividend commitments. This could pose challenges if the trend persists.
• Imperial’s impressive FCF Yield holds appeal even though its dividend yield is moderate, connoting the potential for dividend increments. Likely, the company is employing its cash for debt repayment.
• Universal Corporation lacks attractiveness as its dividend fails to match its cash generation.
• Philip Morris’ FCF is not available, indicating that the Cash Flow Statement has not been disclosed or updated yet (this sometimes occurs with quarterly reports). If you encounter this, simply revisit after a week or more, and the ratio will presumably be updated.

It's as straightforward as that

That's how simple it is to uncover top-notch high yield opportunities. I trust you found it beneficial.

Your analyst facilitating your attainment of the highest yield

PS To pinpoint exceptional high yield companies now, click here.

PPS It's remarkably easy to overlook, so why not register now before getting sidetracked?

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