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“A Simple Dividend Strategy with Extraordinary Returns”

[from Zack's]
This week, I’m going to focus on a simple dividend strategy
that has produced some amazing results over the last few years.

Since it’s a dividend paying strategy, I’ve incorporated a
longer holding period (12-24 weeks).

This strategy is both easy to build and easy to use with the
Research Wizard.

The parameters to this screen are as follows:

Price >= $10
Market Cap >= $500 mil.
Zacks Rank <= 3 (1, 2 or 3 -- no sell ratings allowed)
Current Dividend Yield >= 8%

The Results:

I ran a series of tests using a 24 week holding period over the
last 4 years. Each test was started on a different start date
to eliminate coincidental performance and to verify robustness.

What I found was that every test showed impressive results.

In 2001, the average annualized gross return was 29.8%.

In 2002, the average annualized gross return was 8.3%. (Quite
impressive when compared to the S&P 500’s -22.7%.)

In 2003, the average annualized gross return was a whopping
42.9%, with every 24-week period scoring a win.

And in 2004, the average annualized gross return was 19.1%.

Total Returns:

Since inception, (1/5/2001 thru 2/25/05), the cumulative,
compounded gross return shows an impressive 226.7%.

Wow!

I also tested this strategy using a 12 week holding period as
well. The results were equally as impressive, but of course,
rebalancing more frequently would have cost more in commissions
and the possibility of missed dividends.

Either way, this Dividend Strategy has been a consistent
performer through the ups and downs of the market over the last
4+ years (and hopefully in the years to come).

Currently (3/28/05), there are 13 stocks that qualify this
screen. Here are some names on that list:

ALD Allied Capital Corporation
CHT Chunghwa Telecom
VLCCF Knightsbridge Tankers

To find out what other stocks qualify on this winning strategy,
sign up for your free trial to the Research Wizard. Test this
screen and others or build your own strategies and test them.
Remember, the key to successful screening is in discovering
those strategies that have produced profitable results in the
past. And that’s exactly what you get with the powerful
Backtesting ability of Research Wizard. Start your free trial
now. http://at.zacks.com/?id=1388

All the Screen of the Week strategies are created and
back-tested using the Research Wizard software from Zacks
Investment Research. Learn more about the Research Wizard and
Free Trial offer at http://at.zacks.com/?id=1388


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