the Trade-Radar + TradingStockAlerts blog

Here's a stock I found on the weekend's screen for Total Return Ratio (you can get a free preview of this and other screens that will soon be available at Alert HQ premium ). The company is BT Group (BT). BT is a UK-based provider of communications solutions and services operating in more than 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services. BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale. The perhaps more well-known entity British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. In addition to more mundane telecom activities like phone service, the company is als...

John Neff, who beat the S&P by 3% over the course of 30 years while managing the Vanguard Windsor Fund, attributed much of his success to a metric he liked to use dubbed the "total return ratio." Here is the definition: Total Return Ratio = (analysts' expected earnings growth rate + dividend yield) / price-to-earnings ratio What is interesting about this equation is that it takes into account both earnings growth and dividends. In this era of ultra-low bond yields, stocks that pay dividends are gaining more and more importance. That makes this metric all the more interesting. Let's break the equation down into its constituent parts. Dividend Yield = most recent annual dividend / current share price Finding the analyst expected earnings growth rate isn't as hard as it sounds -- it's built into PEG which is available for most stocks at Yahoo Finance. PEG = PE / annual EPS growth rate Annual EPS growth rate = PE / PEG Now that we have all the piec...