My Top 10 High-Yield Dividend Stocks For September 2024

Market Performance - The SPDR S&P 500 ETF Trust (SPY) achieved a 2.34% return in August, marking its fourth consecutive monthly gain [2] - Vanguard's High Dividend Yield Index Fund ETF Shares (VYM) outperformed SPY with a return of 2.44% [2] - A watchlist of selected stocks yielded a return of 5.45% in August, surpassing both SPY and VYM, with a year-to-date return of 21.82% [2][10] Watchlist Strategy - The watchlist aims to identify high-quality stocks with attractive valuations and a good starting dividend yield, targeting a long-term compound annual growth rate (CAGR) of 12% [2][10] - The current CAGR of the watchlist stands at 18.64% after 46 months, exceeding the target [2][10] - The top 10 stocks on the watchlist for September 2024 collectively offer a dividend yield of 3.59%, more than double that of the S&P 500 [2] Stock Selection Criteria - The watchlist is created based on four main criteria: basic criteria, safety, quality, and stability [3][4] - Basic criteria include a dividend yield above 2.75% and a market capitalization of at least $10 billion [3] - Safety filters exclude companies with payout ratios above 100% and negative 5-year dividend growth rates [3] - Quality is assessed using Morningstar moat ratings and S&P quality ratings of B+ or higher [4] Recent Changes in Watchlist - The September 2024 watchlist includes three new stocks: Interpublic Group of Companies (IPG), PNC Financial Services (PNC), and Essential Utilities (WTRG) [7] - Previous stocks NextEra Energy (NEE), Starbucks (SBUX), and United Parcel Service (UPS) were removed from the watchlist [7] Expected Returns - The expected rate of return for the selected stocks is calculated by combining the current dividend yield with a return to fair value over the next five years [8] - The watchlist aims to provide better returns compared to 18 other high-yield stocks that passed initial filters but ranked lower in quality and valuation [9] Historical Performance - The watchlist has consistently outperformed benchmarks, with a total return of 92.55% since inception and an annualized return of 18.64% [10][12] - Individual stock performances in August 2024 varied, with Coca-Cola Europacific (CCEP) gaining 9.11% and Starbucks (SBUX) increasing by 22.05% [12]