Dividend stocks to start with

Screening Filters

1. is_index_component: ['GSPC'] (S&P 500 members only)

   • Purpose: Limit results to large, established U.S. companies.
   • Rationale:
     • The S&P 500 consists of major, liquid companies with stronger reporting standards and generally better financial stability.
     • For “good stocks to start investing in,” this avoids highly speculative small caps and focuses on widely followed, more mature businesses—often a better starting point for new dividend investors.

2. debt_equity: {max: 2.5}

   • Purpose: Exclude companies with very high leverage.
   • Rationale:
     • A debt-to-equity ratio under 2.5 helps filter out firms that are heavily reliant on debt.
     • Lower leverage generally means less risk that interest costs or refinancing problems will force a cut in the dividend, making the dividend stream more reliable for a beginner investor.

3. dividend_5yr_cagr: {min: 0}

   • Purpose: Require at least non‑declining dividends over the last 5 years.
   • Rationale:
     • A minimum 0% 5‑year dividend CAGR (compound annual growth rate) means the dividend has been flat or growing—not shrinking.
     • This prioritizes companies that have maintained or raised their dividends, a sign of resilience and management’s commitment to shareholder returns.

4. dividend_yield_ttm: {min: 1.5, max: 6}

   • Purpose: Target reasonable, sustainable dividend yields.
   • Rationale:
     • A minimum of 1.5% ensures the dividend is meaningful, not just a token payment.
     • Capping yield at 6% filters out extremely high yields that often signal distress or an unsustainable payout.
     • This range is more appropriate for “good” long-term dividend holdings rather than risky “yield traps.”

5. dividend_payout_ratio: {min: 20, max: 80}

   • Purpose: Focus on dividends that are neither negligible nor likely overstretched.
   • Rationale:
     • A payout ratio below ~20% can mean the company is barely returning cash to shareholders; above ~80% may indicate the dividend is at risk if earnings fall.
     • The 20–80% band aims for a balance: enough earnings paid out to matter, but with room to reinvest in the business and keep the dividend sustainable.

Why Results Match Your Question

• You asked for dividend-paying stocks that are good to start investing in, which generally implies: established businesses, reasonable and sustainable income, and lower fundamental risk.
• Restricting to S&P 500 companies plus moderate leverage, non-declining dividends, sensible yield levels, and balanced payout ratios all work together to:
  • Emphasize quality and stability over speculation.
  • Reduce the chance of dividend cuts.
  • Provide yields that are meaningful but not dangerously high.

Overall, these filters are designed to surface large, relatively stable companies with a history of paying and maintaining (or growing) dividends—well aligned with building a beginner-friendly dividend portfolio.