Build a Recession-Proof Portfolio With the 'I Dream of Dividends' Strategy

investing.com:

InvestingPro offers a sophisticated platform for conducting comprehensive fundamental analyses of companies worldwide. Among its array of functions, the stock scanner stands out, allowing users to select companies using a wide variety of financial indicators.

Furthermore, the platform provides pre-designed strategies tailored to cater to the diverse needs of investors. One such strategy is the «I Dream of Dividends,» designed to identify companies offering both substantial dividends and a relatively high level of income and return on invested capital.

This particular selection approach often leads to the inclusion of robust and well-established defensive brands in the market. These companies can serve as valuable additions to investors' portfolios during economic downturns, potentially offering opportunities in a market characterized by stock price discounts.

Here's how you can harness the power of the strategy on InvestingPro:

Simply go to the scanner section, then scroll within the available strategies and select the 'I Dream of Dividends' strategy we discussed in this article.

Source: InvestingPro

The described «I Dream of Dividends» strategy relies on four key criteria for selecting specific companies:

Source: InvestingPro

For potential modifications or additional criteria, you could consider indicators like net income, market capitalization, or price-to-book (P/B) value. However, it's essential to strike a balance when adding criteria.

Being overly restrictive can limit the pool of eligible companies, so careful consideration should be given to how additional criteria may affect the selection process.

Once the selection process is completed, the InvestingPro tool presents the chosen companies in a tabular format,