I'm having trouble finding the method to track smart beta dividend management. I have an Excel file which contains the prices and the dividends of certain companies, and I want to build a portfolio following the Smart beta process by dividend, I wonder please how to do it and where to start, step by step . thank you so much.
I assume you are researching how quantitative dividend based portfolios are constructed.
One example is the ETF VYM (Vanguard High Dividend Yield ETF). It tracks the FTSE AW High Dividend Yield Index. The methodology document for this index shows that it is based on dividend forecasts (not actual dividends) provided by the company I.B.E.S.. These forecasts are downloaded twice a year. The stocks with the highest forecasted yield (D1/P0) are included in the index with a weight proportional to the stocks' market capitalization.
Another example is the Fidelity ETF FDVV. This one unfortunately is based on a proprietary methodology. Only the current composition is available.
There may be other cases out there. One approach I have heard of (but cannot find online) is to combine a high current dividend yield with a low or moderate payout ratio (because if the Payout Ratio = Dividends per Share/Earnings per Share is high the company may cut its dividend soon). A third factor sometime included is the long term dividend growth rate (a higher rate is considered better).