On Wednesday, I showed you a framework for how to quickly analyze Dividend Growth stocks.

Today, let’s make it more practical - I ran a screen based on the article.

Let’s show you the complete results, how I’d filter them out and what companies look the most interesting.

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Screening Criteria

When I screen, I try to cast my net a bit wider than what I’m actually looking for.

If a great company has a Payout Ratio 3% higher than what I’m looking for, I still want to see it.

So I lowered the cutoffs we discussed on Wednesday.

Here’s what I used:

• Market Cap: $500 million or greater

• Revenue 10 year CAGR: 7% or greater

• EPS 10 year CAGR: 9% or greater

• 5 year average ROIC: 8% or greater

• 5 year average Gross Profit Margin: 35% or greater

• 5 year average Net Profit Margin: 8% or greater

• Dividend Yield: 2% or greater

• Payout Ratio: 70% or lower

That gave us 39 companies to look at.

The Screener Results

This is a strong list to start from.

Let’s look at some basic info about this group of 39 companies.

• Average 10 year Revenue growth: 15.3%

• Average 10 year EPS growth: 21.7%

• Average 5 year ROIC: 33.8%

• Average Gross Margin: 66.0%

• Average Net Margin: 31.5%

• Average Dividend Yield: 3.5%

• Average Payout Ratio: 42.0%

If you want a spreadsheet with all the results, you can get that here:

Download the spreadsheet here

We have a great starting place, but doing a deep dive into 39 companies would still take a lot of time.

Let’s run through our framework from Wednesday and see if we can narrow the list down even further.

Look At The Company Description

There are some industries that I would rule out right away.

In this list, those include:

• Metals and Mining - it’s too cyclical, and there’s no pricing power

• Marine Transportation - also cyclical with limited pricing power

There are some other companies I can pretty quickly rule out as well:

• Restaurant Brands International Limited Partnership - This is a subsidiary of Restaurant Brands International, I’d rather own the parent than a subsidiary

• Coterra Energy - is a U.S. shale oil company, if I’m buying an oil producer I want very low cost, which isn’t shale oil

• Marimekko Oyj - Finnish fashion is way outside my Circle of Competence

I can also rule out financially complex companies like WHSP Holdings Limited, or companies with lot of earnings from markets I don’t understand like Genpac Limited, who generate more than half their revenue from India.

After the first filter, I’m down to just 17 companies: