Good-Yielding Dividend Portfolio With High Reward To Risk Ratio

A good dividend yield, low payout ratio and consistent dividend growth are an essential combination for a long-term successful dividend stocks strategy, but what about reducing the risk? In order to find out good yielding stocks with high reward to risk ratio, I looked for stocks with high Sharpe ratio. Explanation of Sharpe Ratio A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance. The Sharpe ratio is calculated by subtracting the risk-free rate - such as that of the 10-year U.S. Treasury bond - from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. The Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result of excess risk. This measurement is very useful because although one portfolio or fund can reap higher returns than its peers, it is only... Read more