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Build a Recession-Proof Portfolio With the 'I Dream of Dividends' Strategy | Investing.com

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By Investing.comStock Marketswww.investing.com/analysis/build-a-recessionproof-portfolio-with-the-i-dream-of-dividends-strategy-200643261Build a Recession-Proof Portfolio With the 'I Dream of Dividends' StrategyBy Investing.com &nbsp;&nbsp;|&nbsp;&nbsp;Nov 04, 2023 04:00AM ET3InvestingPro offers a sophisticated platform for conducting comprehensive fundamental analyses of companies worldwide. Among its array of functions, the stock scanner stands out, allowing users to select companies using a wide variety of financial indicators.Furthermore, the platform provides pre-designed strategies tailored to cater to the diverse needs of investors. One such strategy is the "I Dream of Dividends," designed to identify companies offering both substantial dividends and a relatively high level of income and return on invested capital.This particular selection approach often leads to the inclusion of robust and well-established defensive brands in the market. These companies can serve as valuable additions to investors' portfolios during economic downturns, potentially offering opportunities in a market characterized by stock price discounts.Here's how you can harness the power of the strategy on InvestingPro:Simply go to the scanner section, then scroll within the available strategies and select the 'I Dream of Dividends' strategy we discussed in this article.Source: InvestingProThe described "I Dream of Dividends" strategy relies on four key criteria for selecting specific companies:Dividend Yield: This fundamental indicator targets companies with a dividend yield ranging from 3% to 10%. The dividend yield ratio is calculated by dividing the value of dividends paid per share by the share price. A higher yield is favored as it signifies greater potential profits for shareholders, demonstrating the company's commitment to sharing earnings.Return on Invested Capital (ROIC): Efficiency in generating returns on invested capital is crucial. A ROIC criterion of over 10% is applied to identify companies capable of achieving investment yields higher than the sector average. This is especially significant for larger, capital-intensive firms, particularly those in the manufacturing sector.P/E Ratio: To filter out companies, this strategy uses the price-to-earnings (P/E) ratio. It is intended to exclude companies with negative P/E ratios. While a lower P/E ratio can suggest relatively attractive share prices, it may also indicate troubled companies facing downward stock trends. To avoid overvalued stocks, an upper limit filter based on sector averages can also be added.Income: This criterion is used to exclude smaller companies that may not have a consistent track record of long-term dividend payments compared to larger, more capitalized companies. Additionally, the duration of continuous dividend payments by a company is considered. Longer track records increase the likelihood of dividend payments continuing in the future.Source: InvestingProFor potential modifications or additional criteria, you could consider indicators like net income, market capitalization, or price-to-book (P/B) value. However, it's essential to strike a balance when adding criteria.Being overly restrictive can limit the pool of eligible companies, so careful consideration should be given to how additional criteria may affect the selection process.Once the selection process is completed, the InvestingPro tool presents the chosen companies in a tabular format, listing those that meet the established criteria within the specified geographic region.Source: InvestingProNotably, one standout indicator among the many available is the "fair value." This metric, determined through a combination of diverse financial models and analyst recommendations, offers insights into whether a company is overvalued or undervalued, often with a specific target price provided.Moreover, to simplify the process and accommodate users of all levels, the scanner categorizes the vast amount of data into six fundamental categories, as illustrated below:This user-friendly breakdown ensures that even novice traders can readily engage in fundamental analysis, leveraging the capabilities offered by the InvestingPro tool.***With InvestingPro, you can conveniently access a single-page view of complete and comprehensive information about different companies all in one place, eliminating the need to gather data from multiple sources and saving you time and effort.Start your free trial today!Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice or recommendation to invest as such and is in no way intended to encourage the purchase of assets. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and associated risk remains with the investor.Build a Recession-Proof Portfolio With the 'I Dream of Dividends' Strategy3Comments (3)3Uber Q3 Earnings: Top-Line Growth, Profitability Could Propel Stock to...Uber's quarterly results will be announced todayThe company has finally reached a settlement with current and former drivers over fees and taxesThere's a high possibility that...4 Things You Can Learn from Warren Buffett's Investing PhilosophyWarren Buffett's unique qualities, including his long-term investment perspective, market detachment, and resilience to drawdowns, underpin his success.While many investors get...Does a Bullish November Await the Stock Market?The Fed's decision to leave rates unchanged triggered a significant change in market sentiment, leading to an impressive market reboundNovember, with its historical strength,...Add a CommentComment Guidelines&nbsp;I have read Investing.com's comments guidelines and agree to the terms described.I AgreeWrite your thoughts hereAre you sure you want to delete this chart?Delete Cancel&nbsp;PostReplace the attached chart with a new chart ?Replace CancelComment GuidelinesShareFollow this postUnfollow this postSaveBlock UserReplyShareFollow this postUnfollow this postSaveBlock UserReplyShareFollow this postUnfollow this postSaveBlock UserReplyShareFollow this postUnfollow this postSaveBlock UserReplyShareFollow this postUnfollow this postSaveReplyAre you sure you want to delete this chart?Delete Cancel&nbsp;PostReplace the attached chart with a new chart ?Replace CancelComment GuidelinesAdd Chart to CommentCancelAttachConfirm BlockAre you sure you want to block %USER_NAME%?By doing so, you and %USER_NAME% will not be able to seeany of each other's Investing.com's posts.%USER_NAME% was successfully added to your Block ListSince you’ve just unblocked this person, you must wait 48 hours before renewing the block.Confirm Block CancelOkReport this commentI feel that this comment is:SpamOffensiveSubmitComment flaggedThank You!Your report has been sent to our moderators for reviewCloseTabs SelectionIndicesCommoditiesBondsStocksCryptoForexETFsApply&nbsp;US 3034,010.9-85.0-0.25%&nbsp;&nbsp;US 5004,355.4-10.6-0.24%&nbsp;&nbsp;Dow Jones34,095.86+34.54+0.10%&nbsp;&nbsp;S&amp;P 5004,365.98+7.64+0.18%&nbsp;&nbsp;Nasdaq13,518.78+40.50+0.30%&nbsp;&nbsp;S&amp;P 500 VIX15.03+0.14+0.94%&nbsp;&nbsp;Dollar Index105.477+0.431+0.41%&nbsp;&nbsp;Crude Oil WTI79.57-1.25-1.55%&nbsp;&nbsp;Brent Oil83.75-1.43-1.68%&nbsp;&nbsp;Natural Gas3.183-0.081-2.48%&nbsp;&nbsp;Gold1,968.20-20.40-1.03%&nbsp;&nbsp;Silver22.608-0.626-2.69%&nbsp;&nbsp;Copper3.6635-0.0555-1.49%&nbsp;&nbsp;US Soybeans1,359.38-3.62-0.27%&nbsp;&nbsp;U.S. 10Y4.629-0.037-0.79%&nbsp;&nbsp;U.S. 30Y4.796-0.035-0.73%&nbsp;&nbsp;U.S. 5Y4.577-0.032-0.70%&nbsp;&nbsp;U.S. 3M5.447+0.021+0.38%&nbsp;&nbsp;US 10Y T-Note107.92+0.33+0.30%&nbsp;&nbsp;Euro Bund130.00+0.47+0.36%&nbsp;&nbsp;10-2 Yield Spread-29.55-2.509.24%&nbsp;&nbsp;Apple179.23+2.58+1.46%&nbsp;&nbsp;Alphabet A130.25+1.15+0.89%&nbsp;&nbsp;Tesla219.27-0.69-0.31%&nbsp;&nbsp;Amazon.com139.74+1.14+0.82%&nbsp;&nbsp;Netflix434.74+2.38+0.55%&nbsp;&nbsp;Meta Platforms315.80+1.20+0.38%&nbsp;&nbsp;Bank of America28.33-0.09-0.32%&nbsp;Most Popular ArticlesFutures point lower, WeWork files for bankruptcy - what's moving...Stock Market Today: Dow ends higher, but rising Treasury yields keep...Oil prices at 2-1/2 month lows as China data offset supply cutsDow Jones, Nasdaq, S&amp;P 500 weekly preview: Fed sparks a massive rallyShares lose steam as doubts cloud interest rate optimismMore News&nbsp;1 Stock to Buy, 1 Stock to Sell This Week: Uber, DisneyBerkshire Hathaway Reports Increased Liquidity: Buffett Gearing Up for...Build a Recession-Proof Portfolio With the 'I Dream of Dividends'...Russell 2000 Eyes 200-DMA Test; S&amp;P 500, Nasdaq Back Above Rising...Does a Bullish November Await the Stock Market?More Analysis&nbsp;Central Banks Rates&nbsp;Central BanksInterest RatesNext Meeting&nbsp;&nbsp;FED5.50%Dec 13, 2023&nbsp;&nbsp;ECB4.50%Dec 14, 2023&nbsp;&nbsp;BOE5.25%Dec 14, 2023&nbsp;&nbsp;SNB1.75%Dec 14, 2023&nbsp;&nbsp;RBA4.35%Nov 07, 2023&nbsp;&nbsp;BOC5.00%Dec 06, 2023&nbsp;&nbsp;RBNZ5.50%Nov 29, 2023&nbsp;&nbsp;BOJ-0.10%Dec 19, 2023&nbsp;&nbsp;CBR15.00%Dec 15, 2023&nbsp;&nbsp;RBI6.50%Dec 08, 2023&nbsp;&nbsp;PBOC3.45%&nbsp;&nbsp;BCB12.25%Dec 13, 2023&nbsp;Sign up with Email

By Investing.comStock Marketswww.investing.com/analysis/build-a-recessionproof-portfolio-with-the-i-dream-of-dividends-strategy-200643261Build a Recession-Proof Portfolio With the 'I Dream of Dividends' StrategyBy Investing.com &nbsp;&nbsp;|&nbsp;&nbsp;Nov 04, 2023 04:00AM ET3InvestingPro offers a sophisticated platform for conducting comprehensive fundamental analyses of companies worldwide. Among its array of functions, the stock scanner stands out, allowing users to select companies using a wide variety of financial indicators.Furthermore, the platform provides pre-designed strategies...

Build a Recession-Proof Portfolio With the 'I Dream of Dividends' Strategy | Investing.com

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