Zacks.com Featured Expert Kevin Matras Highlights: American Capital Strategies, Ship Finance Int'l, and Vector Group Ltd.

CHICAGO -- Kevin Matras goes over a winning, longer-term, dividend investment strategy. Stocks in this week's article are: American Capital Strategies (NASDAQ:ACAS), Ship Finance International Ltd. (NYSE:SFL) and Vector Group Ltd. (NYSE:VGR). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109

Screen of the Week written by Kevin Matras of Zacks Investment Research:

This week, Kevin Matras is going to focus on a simple dividend strategy that has produced some amazing results over the last few years. Since it's a dividend paying strategy, he has incorporated a longer holding period (12 weeks and 24 weeks). This strategy is both easy to build and easy to use with the Research Wizard.

The parameters to this screen are as follows:

--Price greater than or equal to $10

--Market Cap greater than or equal to $500 mil.

--Zacks Rank less than or equal to 3 (1, 2 or 3 -- no sell ratings allowed)

--Current Dividend Yield greater than or equal to 8%

The Results:

Kevin ran a series of tests using a 24-week holding period over the last 4-1/2 years. (Because a 24-week rebalancing period doesn't fit perfectly within a 52 week calendar year, each annual period was started at the beginning of the year and ended after two full 24-week holding periods (48 weeks) and annualized.)

In 2001, the annualized gross return was 31.7% while the S&P 500 was down -11.6%. In 2002, the annualized gross return was 10.4% while the S&P 500's was down -23%. In 2003, the annualized gross return was a whopping 49.2% compared to the S&P's 20.3%. In 2004, the annualized gross return was 19.5% with the S&P up 9.8%. And in the first half of 2005 (first completed 24-week period), the cumulative gross returns were 10.7% versus the S&P's 1.2%.

(Kevin also ran a series of tests rebalancing the portfolio every 12 weeks. These results also showed well, but of course, rebalancing more frequently would have cost more in commissions and the possibility of missed dividends.)

Either way, this Dividend Strategy has been a consistent performer through the ups and downs of the market over the last 4-1/2 years. (And hopefully in the years to come.)

Currently, there are 21 stocks that qualify this screen (for the week of 10/31/05). Here are some current names on that list:

ACAS  American Capital Strategies
SFL   Ship Finance International Ltd.
VGR   Vector Group Ltd.

To find out what other stocks qualify on this winning strategy, sign up for your free trial to the Research Wizard. Test this screen and others or build your own strategies and test them.

Remember the key to successful screening is in discovering those screens that have produced profitable results in the past. And that's exactly what you get with the powerful Backtesting ability of Research Wizard. Click here to find out more about our free trial. http://at.zacks.com/?id=111

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112

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