Dividend income investors seeking for a high income
stream from dividends. In addition, capital gains from stocks trades are a welcome
bonus for a long-term investor like me. Over a long period, such capital gains are
much higher than the amount of dividends. I personally have a ratio of 1:2. This
means for every dollar in dividends I could generate additional two dollars of stock
gains. Most of my capital gains are unrealized because I hold them for a very long
time.
However, I started a new screen from the services
sector. I wanted to know what stocks picks could be the best for next year. Last
year’s picks gained 31.16 percent while the sector was up 23.16 percent compared
to the previous year.
These are my criteria:
- Forward P/E under 15
- Past 5Y Sales growth over 10 percent
- Earnings per share growth for the next five
years over 10 percent
- Operating Margin over 10 percent
- Market capitalization above USD 2 billion
Fourteen stocks fulfilled these criteria of which
eight pay dividends and twelve are currently recommended to buy. The results
are dominated by business services stocks and discount, variety store concepts.