Dividend Growth Pullback Screener

Dividend Growth Pullback Screener

Overview

This skill screens for dividend growth stocks that exhibit strong fundamental characteristics but are experiencing temporary technical weakness. It targets stocks with exceptional dividend growth rates (12%+ CAGR) that have pulled back to RSI oversold levels (≤40), creating potential entry opportunities for long-term dividend growth investors.

Investment Thesis: High-quality dividend growth stocks (often yielding 1-2.5%) compound wealth through dividend increases rather than high current yield. Buying these stocks during temporary pullbacks (RSI ≤40) can enhance total returns by combining strong fundamental growth with favorable technical entry timing.

When to Use This Skill

Use this skill when:

• Looking for dividend growth stocks with exceptional compounding potential (12%+ dividend CAGR)
• Seeking entry opportunities in quality stocks during temporary market weakness
• Willing to accept lower current yields (1.5-3%) for higher dividend growth
• Focusing on total return over 5-10 years rather than current income
• Market conditions show sector rotations or broad pullbacks affecting quality names

Do NOT use when:

• Seeking high current income (use value-dividend-screener instead)
• Requiring immediate dividend yields >3%
• Looking for deep value plays with strict P/E or P/B requirements
• Short-term trading focus ( 1.0 (liquidity)

Phase 2: Technical Screening (RSI Calculation)

RSI Calculation:

• 14-period RSI using daily closing prices
• Formula: RSI = 100 - (100 / (1 + RS))
• RS = Average Gain / Average Loss over 14 periods
• Data source: FMP historical prices (past 30 days)

RSI Filter:

• RSI ≤ 40 (oversold/pullback condition)
• RSI interpretation:
• 40: Not oversold (excluded)

Phase 3: Ranking and Output

Composite Scoring (0-100):

• Dividend Growth (40%): Reward higher CAGR and consistency
• Financial Quality (30%): ROE, profit margins, debt levels
• Technical Setup (20%): Lower RSI = better entry opportunity
• Valuation (10%): P/E and P/B for context (not exclusionary)

Stocks ranked by composite score. Top scorers combine exceptional dividend growth with attractive technical entry points.

Understanding the Results

Interpreting RSI Levels

RSI 25-30 (Extreme Oversold):

• Often indicates panic selling or negative news
• Higher risk but potentially highest reward
• Recommended: Wait for RSI to turn up (sign of stabilization)
• Entry: Scale in with 50% position, add on RSI >30

RSI 30-35 (Strong Oversold):

• Normal correction in strong uptrend
• Lower risk than extreme oversold
• Recommended: Can initiate position immediately
• Entry: Full position acceptable, set stop loss 5-8% below

RSI 35-40 (Early Pullback):

• Mild weakness in uptrend
• Lowest risk of further decline
• Recommended: Conservative entry for high conviction stocks
• Entry: Full position, tight stop loss 3-5% below

Dividend Growth Compounding Examples

12% Dividend CAGR (Minimum Threshold):

• Starting Yield: 1.5%
• Year 6: 2.96% yield on cost (doubled)
• Year 12: 5.85% yield on cost (4x)
• Example: Visa (V), Mastercard (MA) historical profile

15% Dividend CAGR (Excellent):

• Starting Yield: 1.8%
• Year 6: 4.08% yield on cost (2.3x)
• Year 12: 9.22% yield on cost (5.1x)
• Example: Microsoft (MSFT) 2010-2020 period

20% Dividend CAGR (Exceptional):

• Starting Yield: 2.0%
• Year 6: 6.00% yield on cost (3x)
• Year 12: 18.0% yield on cost (9x)
• Example: Apple (AAPL) 2012-2020 period

Key Insight: Lower starting yield + high growth > high starting yield + low growth over 10+ years.

Troubleshooting

No Results Found

Possible Causes:

1. Market conditions: Strong bull market with few oversold stocks
2. Criteria too strict: 12% dividend growth is rare (5-10 stocks typically qualify)
3. RSI threshold too low: Consider raising to RSI ≤45 for more candidates

Solutions:

• Relax RSI threshold: --rsi-max 45 (early pullback phase)
• Lower dividend growth: --min-div-growth 10.0 (still excellent growth)
• Lower minimum yield: --min-yield 1.0 (capture more growth stocks)

API Rate Limit Reached

FMP Free Tier Limits:

• 250 requests/day
• Each stock analyzed requires 6 API calls (quote, dividend, prices, income, balance, cashflow, metrics)
• Maximum ~40 stocks per day in FMP-only mode

Solutions:

1. Use FINVIZ Two-Stage Approach (RECOMMENDED)

python3 skills/dividend-growth-pullback-screener/scripts/screen_dividend_growth_rsi.py --use-finviz

• FINVIZ pre-screening: 1 API call → 10-50 candidates (already filtered by RSI)
• FMP analysis: 6 calls × 10-50 stocks = 60-300 FMP calls
• Advantage: FINVIZ RSI filter dramatically reduces candidates, staying within FMP limits

2. Limit FMP-Only Candidates

python3 skills/dividend-growth-pullback-screener/scripts/screen_dividend_growth_rsi.py --max-candidates 40

3. Wait 24 Hours for Rate Limit Reset

• FMP resets at UTC midnight

4. Upgrade to FMP Paid Plan

• Starter ($14/month): 500 requests/day
• Professional ($29/month): 1,000 requests/day

Note: FINVIZ Elite subscription ($40/month) + FMP free tier is more cost-effective than FMP paid plans for this use case.

RSI Calculation Errors

Issue: "Insufficient price data for RSI calculation"

Cause: Stock has less than 30 days of trading history (IPO or inactive)

Solution: Script automatically skips stocks with insufficient data. No action needed.

Combining with Other Skills

Pre-Screening Context:

1. Market News Analyst → Identify sector rotations or market pullbacks
2. Breadth Chart Analyst → Confirm broader market oversold conditions
3. Economic Calendar Fetcher → Check for upcoming rate decisions or macro events

Post-Screening Analysis:

1. Technical Analyst → Analyze individual stock charts for qualified candidates
2. US Stock Analysis → Deep dive on specific stocks before entry
3. Backtest Expert → Validate RSI + dividend growth strategy historically

Example Workflow:

1. Market News Analyst: "Market pulled back 5% this week on Fed hawkish comments"
2. Breadth Chart Analyst: Confirms market oversold (S&P breadth weak)
3. Dividend Growth Pullback Screener: Finds 8 quality dividend growers with RSI <35
4. Technical Analyst: Analyze top 3 candidates for support levels and entry timing
5. Execute: Enter scaled positions with 6-12 month time horizon

Resources

scripts/

screendividendgrowth_rsi.py - Main screening script

• Integrates FMP API for fundamental data
• Calculates 14-period RSI from historical prices
• Applies multi-phase filtering and ranking
• Outputs JSON and markdown reports

references/

rsioversoldstrategy.md - RSI indicator explanation

• How RSI identifies oversold conditions
• Difference between extreme oversold (<30) vs. early pullback (30-40)
• Combining RSI with fundamental analysis
• False positive management and risk mitigation

dividendgrowthcompounding.md - Dividend growth mathematics

• Power of 12%+ dividend CAGR over time
• Yield vs. growth trade-offs
• Historical examples (MSFT, V, MA, AAPL)
• Quality characteristics of dividend growth stocks

fmpapiguide.md - API usage documentation

• API key setup and management
• Endpoint documentation for screening
• Rate limiting strategies
• Error handling and troubleshooting

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Disclaimer: This screening tool is for informational purposes only. Past dividend growth does not guarantee future performance. Conduct thorough due diligence before making investment decisions. RSI oversold conditions do not guarantee price reversals - stocks can remain oversold for extended periods.

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: tradermonty
• Source: tradermonty/claude-trading-skills
• License: MIT
• Homepage: https://tradermonty.github.io/claude-trading-skills/

Install and usage instructions live in the source repository linked above.