I believe your method is sound if you take a few trivial precautions during the painting. You can avoid blurred and/or smudged lettering by ensuring the stencil is fastened well to the surface.
Consider to provide additional holes closely spaced to the letters. Applying masking tape through the holes will keep the edges of the stencil tight to the surface, but will not add much to your labor efforts. Obviously, you'll want additional masking (stencil area) well outbound of the lettering and lettering support holes, to keep overspray clear of the background.
The material you use for your stencil will be important too. Avoid absorbent paper material and shoot for something like butcher paper, which is often waterproof to a degree.
As with any spray paint application, multiple light coats will prevent runs/drips and result in a better image.
On the high tech end, there was a Kickstarter campaign called SprayPrinter, which converted an ordinary spray paint can to a phone-controlled dot-matrix printer based on an image provided to the phone. Version one was relatively low resolution, 320 pixels square, while v2 increased that, but I've discovered that neither version appears to be available at a retail level.
I'm not sure how well a text job would appear, although one can easily pixel convert text to old-style dot-matrix printing level!