Is Go-ahead a worthy addition to your portfolio?
Screening for companies with strong balance sheets and solid dividend yields can be a quick and simple way of identifying potentially high-quality investments that might be attractively priced. One way of doing might be to include stocks that have a Piotroski F-Score of 8 or 9 and a dividend yield of at least, say, 3%.
Take Go-ahead (LON:GOG), for example, which is a mid cap adventurous super stock company in the Industrials sector. Go-ahead pays out a rolling 5.08% of its share price in dividend payments.
Does Go-ahead pass our F-Score test?
Stockopedia applies algorithms to its stream of financial data to automatically calculate the Piotroski F-Score for every stock on the market. It shows that Go-ahead scores 8 out of a possible 9.
By investing in companies scoring 8 or 9 by these measures, Piotroski showed that, over a 20-year test period through to 1996, the return earned by a value-focused investor could be increased by an astounding 7.5% each year. Even better, it suggests that the company is well-placed to continue to pay out attractive dividends.
What does this mean for potential investors?
Go-Ahead has an F-Score that suggests it could be a promising investment candidate worthy of further research - but it's only a first step. Higher F-Score stocks can still have weaknesses and may trade at premium prices compared to other stocks. We've identified some areas of concern with Go-Ahead that you can find out about here.
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