Seagate Technology’s Cash Flow Increases The Safety Of Its Dividend Yield

Nine new stocks make the Safest Dividend Yields Model Portfolio this month, which was made available to members on September 23, 2020.

Recap from August’s Picks

On a price return basis, the Safest Dividend Yields Model Portfolio (-2.5%) outperformed the S&P 500 (-3.3%) by 0.8% from August 20, 2020 through September 21, 2020. On a total return basis, the Model Portfolio (-2.1%) outperformed the S&P 500 (-2.9%) by 0.8% over the same time. The best performing large cap stock was up 11% and the best performing small cap stock was up 6%. Overall, 12 out of the 20 Safest Dividend Yield stocks outperformed their respective benchmarks (S&P 500 and Russell 2000) from August 20, 2020 through September 21, 2020.

Only my firm’s research utilizes the superior data and earnings adjustments featured by the HBS & MIT Sloan paper, “Core Earnings: New Data and Evidence.” This Model Portfolio leverages my firm’s Robo-Analyst technology[1], which scales forensic accounting expertise (featured in Barron’s) across thousands of stocks.[2]

This Model Portfolio only includes stocks that earn an attractive or very attractive rating, have positive free cash flow and economic earnings, and offer a dividend yield greater than 3%. Companies with strong free cash flow provide higher quality and safer dividend yields because I know they have the cash to support the dividend. I think this portfolio provides a uniquely well-screened group of stocks that can help clients outperform.

Featured Stock for September: Seagate Technology, PLC

Seagate Technology (STX), is the featured stock in September’s Safest Dividend Yields Model Portfolio.

I made Seagate a Long Idea in September 2010 and closed out the position in August 2015. The stock outperformed the S&P 500 (up 361% vs. S&P up 86%) over that time. Once again, STX