New index lists stable stocks

IndicesS&P Indices has launched an index designed to identify high quality stocks in terms of growth and stability in earnings and dividends.

The S&P International Developed High Quality Rankings Index targets non-US stocks and has been licenced to PowerShares for the creation of exchanged-traded products.

“This index has an underlying value focus, and therefore is a natural alternative to many actively managed value funds,” said Alka Banerjee, Vice President of Global Equity Indices at S&P Indices.

The index is calculated by S&P Quality Rankings. Rankings are generated by an algorithm drawn from stocks’ per-share earnings and dividend records over the last seven years.

The basic scores are calculated for earnings and dividends and are then adjusted for changes in the rate of growth, cyclicality and stability within long-term trends. The adjusted scores for earnings and dividends are then combined to yield a final ranking.

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