COMPOUND INCOME SCORES
These have been used to produce the Portfolio Performance shown in the table above and in the graph shown on the Portfolio page.
You can subscribe to gain access to them, see full details of the Portfolio and all the transactions. If you choose to subscribe by using the links below, you will also get a FREE e-book detailing the thinking and academic research behind the Scores. In addition there is a regularly updated Journal detailing rationale for transactions and on going news flow for portfolio holdings.
If you are interested in learning more about the Scores and what's behind them then read the further details on the Scores below to discover more. Alternatively if you are ready to get the Scores working for you in identifying good value quality companies with the potential to grow their dividends then see the links below. Once subscribed you will also be able to access the Scores directly from the subscriber link on the site too.
In addition to these we have recently added three other Scoring systems for stocks as follows:
1) Shareholder Yield where share buy backs are taken into account as this is said by some to be a better way of identifying yield stocks if that is something you want to focus on.
2) Value, Quality & Momentum Scores more broadly across more than 1500 shares in the UK market rather than those just dividend paying stocks. This can therefore help you to quickly identify any attractively valued stocks with good quality and which are showing good price momentum. This is based on famous research from the late Robert Haugen which found that lower risk stocks tended to outperform the more risky stocks, which is the opposite of conventional financial theory. See here to find out more about that.
3) The Conservative Formula which was developed by Pim Van Vliet & David Blitz in a research paper in 2018. This dovetails in quite well with the other 2 new scoring systems above as it utilizes low volatility (similar to the low risk identified by Haugen), high net pay out yield or Shareholder yield and strong price momentum similar to the Haugen model.
These are all presented in another table along with the original Compound Income Scores so subscribers will be able to search and see at a glance how a stock scores on these different systems which should then help one to decide if a stock looks worthy of further research or not. If that sounds of interest then please see the links below.
SUBSCRIBE HERE USING ONE OF THESE LINKS:
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Google Drive our best value annual plan. You will also be able to access them via the subscriber link in the Scores menu on the site.
If you would prefer to pay by Monthly instalments to access the Scores via Google Sheets / Drive or directly via the subscribers link on the website then please use this link.
Finally, if you would like a one off one month access to the Scores via Google Sheets / Drive or via the subscribers link on the website then please use this link.
Please note this is not an automatic process as it has to be done manually, but we will endeavour to do it as quickly as possible once we receive notification of your request and your payment instructions are set up. So once you sign up look out for an e-mail from us and your chosen service with an invitation to view the Scores file & please do check your junk mail folder too as sometimes these end up there.
Further details on the Scores.
Why were they created.
I found when researching shares and investigating stocks that came up in screens that I was always looking at the same individual metrics on each individual stock to see if they appealed and if they were likely to help me meet my objectives. As a result of this I set out to create a bespoke Scoring system that would point me towards and highlight the stocks that provided the best mix of characteristic that I am looking for.
These characteristics were also based on fundamental factors such as Value, quality, financial security, dividends and momentum which have been found to help in identify outperforming shares. As I am aiming to grow my capital and income in real terms over time, I therefore look to Compound Quality Growing Income or CQGI, this is the essence of Compound Income.
What are the trying to do.
The Compound Income Scores (CIS) are designed as a way to help me do this by quickly identifying UK listed equities which are offering good value, with robust operating characteristics and a yield that is well covered, which has been growing consistently and is forecast to grow in the current year with those forecasts ideally supported by positive estimate revisions. These are then presented in a table with scores on each of the underlying metrics. These are then re-ranked to give the Compound Income Score or CI↑ Score with 100 being the best and 0 the worst.
Points to note are that the highest ranked stocks will not necessarily have highest yields given all the other factors being taken into account and evidence presented below that suggests that the 4th quintile of yields rather than the 5th or highest quintile tends to perform better. This is mostly due to the highest yields tending to be less well covered and therefore more vulnerable to being cut with a knock on effect to returns.
However, with the scores being broken down by the different factors including cover and with other valuation metrics like P/E and EBIT/EV being presented, it is quite easy to get a quick feel for a stock and why it scores well. I have also added price momentum, over bought / over sold indicators and dividend growth figures both 5 year historic and one year forecast as well as a suggested sustainable growth rate based on the pay out ratio and average ROCE. Market capitalisation and enterprise value figures are also presented so you can get a feel for the size of the Company and its debt / cash levels at a glance. Finally more recently I have also added a Triple Trend Momentum indicator which helps to produce Buy, Hold, Avoid and Sell suggestions on all stocks covered by the Scores.
How can they be used?
Personally I find the Scores to be a useful way of identifying interesting candidates for further research and also for quickly identifying if an unfamiliar stock that crops up might be worthy of spending any more time on researching. I therefore use the Scores daily in my personal investing and also run a substantial part of my portfolio based on them and one of our accounts now mirrors the trades represented in the Compound Income Scores Portfolio model portfolio mentioned earlier.
You can also use the spreadsheet as a way of sorting or filtering by particular metrics. For example you could filter the list by top 40% of CI↑Scores with a yield of at least say 3% and dividend growth of at least 2% to give a reduced list of stocks from which you could pick. That is just a suggestion of course, you can filter and sort on any of the metrics. This gives it more flexibility than a screener which you would have to enter lots of different minimum / maximum values in to cover these data inputs and probably end up with only a handful of stocks in the list and no idea of how they compared with the excluded companies. However, I would not recommend just buying the highest scoring stocks, these should be used as a guide to those stocks which may be worthy or further research and help to steer you away from those that are potentially unattractive. While you can then also use the Triple Trend Momentum indicators as a further guide to those that are being recognized or shunned by the market based on their share price performance in both an absolute and relative sense and if their earnings are at least stable or rising.
The CI↑ Scores therefore give you a quick overview of more than 500 UK listed dividend paying stocks ranging from FTSE 100 down to AIM. I have excluded zero yields from the list although I did relax this for FTSE stocks for the sake of completeness at the larger end of the scale. As mentioned at the start these have been used to produce the Portfolio Performance shown in the table at the top of this page and in the graph on the Portfolio page. If you would like to gain access to the Scores as part of your investing, see full details of the Portfolio and all the transactions. If you choose to subscribe you will also get a FREE e-book detailing the thinking and academic research behind the Scores.
SUBSCRIBE HERE USING THESE LINKS:
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Dropbox.
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Google Drive.
Please note this is not an automatic process as it has to be done manually, but we will endeavour to do it as quickly as possible once we receive notification of your request and your payment instructions are set up. So once you sign up look out for an e-mail from us and your chosen service with an invitation to view the Scores file & please do check your junk mail folder too as sometimes these end up there.
Once you are signed up the Scores will update automatically in your Dropbox, Google drive (see subscription links above for these option) in your shared files folder each time the scores are updated. This is done on a Daily basis except for holiday time or when I am away, but this means you should get at least 48 weeks worth of Scores per year which therefore works out at a bargain price equivalent to around 20 pence per day.
If you are unfamiliar with Dropbox and want to learn more and set one up then see this link for more information.
If you are unfamiliar with Google Drive and want to learn more and set one up then see this link for more information.
Dividend Growth Stocks can provide higher returns with lower risk as shown in the first chart below based on US Data in first chart & for EAFE (Rest of the Developed World ) in second one :
These have been used to produce the Portfolio Performance shown in the table above and in the graph shown on the Portfolio page.
You can subscribe to gain access to them, see full details of the Portfolio and all the transactions. If you choose to subscribe by using the links below, you will also get a FREE e-book detailing the thinking and academic research behind the Scores. In addition there is a regularly updated Journal detailing rationale for transactions and on going news flow for portfolio holdings.
If you are interested in learning more about the Scores and what's behind them then read the further details on the Scores below to discover more. Alternatively if you are ready to get the Scores working for you in identifying good value quality companies with the potential to grow their dividends then see the links below. Once subscribed you will also be able to access the Scores directly from the subscriber link on the site too.
In addition to these we have recently added three other Scoring systems for stocks as follows:
1) Shareholder Yield where share buy backs are taken into account as this is said by some to be a better way of identifying yield stocks if that is something you want to focus on.
2) Value, Quality & Momentum Scores more broadly across more than 1500 shares in the UK market rather than those just dividend paying stocks. This can therefore help you to quickly identify any attractively valued stocks with good quality and which are showing good price momentum. This is based on famous research from the late Robert Haugen which found that lower risk stocks tended to outperform the more risky stocks, which is the opposite of conventional financial theory. See here to find out more about that.
3) The Conservative Formula which was developed by Pim Van Vliet & David Blitz in a research paper in 2018. This dovetails in quite well with the other 2 new scoring systems above as it utilizes low volatility (similar to the low risk identified by Haugen), high net pay out yield or Shareholder yield and strong price momentum similar to the Haugen model.
These are all presented in another table along with the original Compound Income Scores so subscribers will be able to search and see at a glance how a stock scores on these different systems which should then help one to decide if a stock looks worthy of further research or not. If that sounds of interest then please see the links below.
SUBSCRIBE HERE USING ONE OF THESE LINKS:
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Google Drive our best value annual plan. You will also be able to access them via the subscriber link in the Scores menu on the site.
If you would prefer to pay by Monthly instalments to access the Scores via Google Sheets / Drive or directly via the subscribers link on the website then please use this link.
Finally, if you would like a one off one month access to the Scores via Google Sheets / Drive or via the subscribers link on the website then please use this link.
Please note this is not an automatic process as it has to be done manually, but we will endeavour to do it as quickly as possible once we receive notification of your request and your payment instructions are set up. So once you sign up look out for an e-mail from us and your chosen service with an invitation to view the Scores file & please do check your junk mail folder too as sometimes these end up there.
Further details on the Scores.
Why were they created.
I found when researching shares and investigating stocks that came up in screens that I was always looking at the same individual metrics on each individual stock to see if they appealed and if they were likely to help me meet my objectives. As a result of this I set out to create a bespoke Scoring system that would point me towards and highlight the stocks that provided the best mix of characteristic that I am looking for.
These characteristics were also based on fundamental factors such as Value, quality, financial security, dividends and momentum which have been found to help in identify outperforming shares. As I am aiming to grow my capital and income in real terms over time, I therefore look to Compound Quality Growing Income or CQGI, this is the essence of Compound Income.
What are the trying to do.
The Compound Income Scores (CIS) are designed as a way to help me do this by quickly identifying UK listed equities which are offering good value, with robust operating characteristics and a yield that is well covered, which has been growing consistently and is forecast to grow in the current year with those forecasts ideally supported by positive estimate revisions. These are then presented in a table with scores on each of the underlying metrics. These are then re-ranked to give the Compound Income Score or CI↑ Score with 100 being the best and 0 the worst.
Points to note are that the highest ranked stocks will not necessarily have highest yields given all the other factors being taken into account and evidence presented below that suggests that the 4th quintile of yields rather than the 5th or highest quintile tends to perform better. This is mostly due to the highest yields tending to be less well covered and therefore more vulnerable to being cut with a knock on effect to returns.
However, with the scores being broken down by the different factors including cover and with other valuation metrics like P/E and EBIT/EV being presented, it is quite easy to get a quick feel for a stock and why it scores well. I have also added price momentum, over bought / over sold indicators and dividend growth figures both 5 year historic and one year forecast as well as a suggested sustainable growth rate based on the pay out ratio and average ROCE. Market capitalisation and enterprise value figures are also presented so you can get a feel for the size of the Company and its debt / cash levels at a glance. Finally more recently I have also added a Triple Trend Momentum indicator which helps to produce Buy, Hold, Avoid and Sell suggestions on all stocks covered by the Scores.
How can they be used?
Personally I find the Scores to be a useful way of identifying interesting candidates for further research and also for quickly identifying if an unfamiliar stock that crops up might be worthy of spending any more time on researching. I therefore use the Scores daily in my personal investing and also run a substantial part of my portfolio based on them and one of our accounts now mirrors the trades represented in the Compound Income Scores Portfolio model portfolio mentioned earlier.
You can also use the spreadsheet as a way of sorting or filtering by particular metrics. For example you could filter the list by top 40% of CI↑Scores with a yield of at least say 3% and dividend growth of at least 2% to give a reduced list of stocks from which you could pick. That is just a suggestion of course, you can filter and sort on any of the metrics. This gives it more flexibility than a screener which you would have to enter lots of different minimum / maximum values in to cover these data inputs and probably end up with only a handful of stocks in the list and no idea of how they compared with the excluded companies. However, I would not recommend just buying the highest scoring stocks, these should be used as a guide to those stocks which may be worthy or further research and help to steer you away from those that are potentially unattractive. While you can then also use the Triple Trend Momentum indicators as a further guide to those that are being recognized or shunned by the market based on their share price performance in both an absolute and relative sense and if their earnings are at least stable or rising.
The CI↑ Scores therefore give you a quick overview of more than 500 UK listed dividend paying stocks ranging from FTSE 100 down to AIM. I have excluded zero yields from the list although I did relax this for FTSE stocks for the sake of completeness at the larger end of the scale. As mentioned at the start these have been used to produce the Portfolio Performance shown in the table at the top of this page and in the graph on the Portfolio page. If you would like to gain access to the Scores as part of your investing, see full details of the Portfolio and all the transactions. If you choose to subscribe you will also get a FREE e-book detailing the thinking and academic research behind the Scores.
SUBSCRIBE HERE USING THESE LINKS:
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Dropbox.
Please use this link if you would like to subscribe to the Compound Income Scores & Portfolio in your Google Drive.
Please note this is not an automatic process as it has to be done manually, but we will endeavour to do it as quickly as possible once we receive notification of your request and your payment instructions are set up. So once you sign up look out for an e-mail from us and your chosen service with an invitation to view the Scores file & please do check your junk mail folder too as sometimes these end up there.
Once you are signed up the Scores will update automatically in your Dropbox, Google drive (see subscription links above for these option) in your shared files folder each time the scores are updated. This is done on a Daily basis except for holiday time or when I am away, but this means you should get at least 48 weeks worth of Scores per year which therefore works out at a bargain price equivalent to around 20 pence per day.
If you are unfamiliar with Dropbox and want to learn more and set one up then see this link for more information.
If you are unfamiliar with Google Drive and want to learn more and set one up then see this link for more information.
Dividend Growth Stocks can provide higher returns with lower risk as shown in the first chart below based on US Data in first chart & for EAFE (Rest of the Developed World ) in second one :
Disclaimer
The Scores should not be construed as investment advice or a recommendation to buy or sell any of the shares mentioned. Readers should remember that share based investments can go down as well as up and you should only invest with capital that you can afford to lose. You should also generally get professional advice before investing unless you are happy to do so without.
Compound Income makes no representations as to the accuracy or completeness of any information on the website or found by following any link on the website and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display and use. All information is provided on an as is basis and this is an unregulated service.
The Scores should not be construed as investment advice or a recommendation to buy or sell any of the shares mentioned. Readers should remember that share based investments can go down as well as up and you should only invest with capital that you can afford to lose. You should also generally get professional advice before investing unless you are happy to do so without.
Compound Income makes no representations as to the accuracy or completeness of any information on the website or found by following any link on the website and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display and use. All information is provided on an as is basis and this is an unregulated service.
