Monthly pay (MoPay) dividend dog stock lists reviewed in June and July prompted reader suggestions to expand the stocks list to include funds, trusts, and partnerships. A list of MoPay equities to buy and hold in October resulted from reader additions supplemented with a high yield collection from here. Thereafter the docile, sleeping dogs list was supplemented by an upside potential article in October and a upside vs. buy & hold in November. Factoring December reader comment, another list, plus January and February reader input, this article compared and contrasted March MoPay stocks (looking at their upside potential) against high yield (and higher risk) buy and hold fund, trust and partnership constituents.
Monthly Pay Dividend Advantages
Quarterly and annual pay dividend stock owners anxiously await announcements from a firm, fund, or analyst to learn if their next dividend will be higher, lower, or paid at all. Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check or statement. If the equity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.
In January reader TennisBoy88 wrote: "One other advantage of monthly paying stocks is the way they are slightly protected against traders that buy just before the ex-date and sell after the record date. The brokerage commissions they have to pay for a measly monthly dividend helps keep them away and the stock price doesn't fluctuate so wildly."
Dogs of the Index Metrics Extracted Bargains
For this article twenty-seven dividend equities plus thirty funds and trusts were culled from over 400 entities paying monthly returns. These were ranked as of March 13, 2013 using the two key dog performance metrics: (1) stock price; (2) annual dividend. Dividing the annual dividend by the price declared the percentage yield by which each dividend dog stock was ranked.
Historically dividend dog investors utilized this ranking system to select portfolios of five or ten stocks in any one index, sector, survey, or list to trade. They awaited the results from their investments in the lowest priced, highest yielding stocks and prayed that the price of every stock they now owned climbed higher (having locked in a high yield percentage at purchase).
Dogs of the index strategy, popularized by Michael B. O'Higgins in the book "Beating The Dow" (HarperCollins, 1991), revealed how high yielding stocks whose prices increase (and whose dividend yields therefore decrease) can be sold off once each year to sweep gains to reinvest the seed money into higher yielding stocks in the same index. Prior to the publication of the O'Higgins book, Dow dogs were known by some market watchers as "fallen angels."
Monthly Pay Dividend Stocks
The ten monthly dividend equities showing the best yields In March represented three of the nine Yahoo market sectors. The top dog stock revealed by Yahoo Finance data was Armour Residential REIT (NYSE:ARR) one of seven financial firms that dominated the list. The remaining six financial MoPay dogs placed second through fourth and sixth to eighth in March: Javelin Mortgage Investment Corp. (NYSE:JMI); Full Circle Capital Corp. (NASDAQ:FULL); Prospect Capital Corporation (NASDAQ:PSEC); Fifth Street Finance (NYSE:FSC); Horizon Technology Finance Corp. (NASDAQ:HRZN); Gladstone Capital Corporation (NASDAQ:GLAD).
The fifth slot in the top ten was filled by the lone utility in the top ten, Just Energy Group Inc. (NYSE:JE). Two basic materials concerns, Pengrowth Energy (NYSE:PGH) and Vanguard Natural Resources (NYSE:VNR) rounded out the list in ninth and tenth places.
Dividend vs. Price Results for MoPay Divi Stocks
Relative strengths for the top ten MoPay dividend dog stocks by yield was graphed below as of March 13, 2013. Ten periods of historic projected annual dividend history from $1000 invested in the ten highest yielding stocks and the total single share price of those ten stocks created the data points for each period shown in blue for dividend and green for price.
Actionable Conclusion One: MoPay DiviDog Stocks Take a Bullish Turn
Charts displayed MoPay dividend dog stocks in a bullish trend since November 2012. Dividend from $1k invested in each of the top ten stocks decreased 6.7% while aggregate single share price of the ten rose 4.8% in that period. Most recently, dividend dropped 3.3% as price popped up 13% from February into March.
Actionable Conclusion Two: Analysts Forecast 2014 Top MoPay DiviDog Stock Net Gains over 16%
Top ten dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of March 13, 2013 and those projected by analyst mean price target estimates to the same date in 2014.
Historic prices and actual dividends paid from $1000 invested in the ten highest yielding stocks and the aggregate single share prices of those ten stocks created the data points for 2013. Projections based on estimated increases in dividend amounts from $1000 invested in the ten highest yielding stocks and aggregate one year analyst mean target prices as reported by Yahoo Finance created the 2014 data points in blue for dividend and green for price. Note: one year target estimated prices below current price were also included.
Actionable Conclusion Three: Analysts Forecast 2014 NEXT10 MoPay DiviDog Stock Net Gains over 21%
The ten monthly dividend equities showing the next best yields in March represented four of the nine Yahoo market sectors. The eleventh dog stock revealed by Yahoo Finance data was Student Transportation, Inc. (NASDAQ:STB) the lone service firm in the next 10 MoPay dog list. Three of five financial firms paced twelfth, thirteenth, and fourteenth: Gladstone Investment (NASDAQ:GAIN), Gladstone Commercial REIT (NASDAQ:GOOD), and Whitestone REIT (NYSEMKT:WSR).
The remaining six next ten MoPay dogs consisted of: three basic materials firms, Enerplus Corp. (NYSE:ERF) in the fifteenth slot, Baytex Energy Corp (NYSE:BTE) eighteenth, and Gold Resource Corporation (NYSEMKT:GORO) in twentieth; one utility, Atlantic Power Corporation (NYSE:AT) placed in the sixteenth row; then the last two financials, America Realty Capital Properties (ARCP) placed seventeenth, and Inland REIT (NYSE:IRC) placed nineteenth.
Charting MoPay DiviDog Stock March Upsides
Ten equities paying out top monthly dividend yields were ranked using the two key dog performance metrics: (1) stock price; (2) annual dividend. Dividing the annual dividend by the price declared the percentage yield by which each dividend dog stock was primarily ranked. (3) One year mean target price estimates by analysts flagged five of the top ten MoPay equities showing higher prices for 2014 and (4) one year mean target price estimates by analysts also flagged five of the next ten MoPay equities showing higher prices for 2014.
A hypothetical $1000 investment in each equity was divided by the current share price to find a number of shares purchased. The number of shares was multiplied by projected annual per share dividend amounts to find a dividend return amount. Thereafter one year mean target prices multiplied by the number of shares supplemented the dividend amount minus a flat $20 broker fee to determine a net gain amount for the top five stocks showing upside price gains into 2014.
For the coming year, Yahoo Finance projected a 4.4% lower dividend from $1k invested in each stock within the top MoPay group while aggregate single share price for the ten was projected by analysts to increase by 6%. The next ten dogs showed a 13% lower dividend from $1k invested in each stock while share price for the ten was projected by analysts to increase by 18%. The number of analysts contributing to the mean target price estimate for each stock is noted in the far right column on the charts. Three to nine analysts was considered optimal for a valid projection estimate.
Net gains from ten probable profit generating trades (five from the top ten and five from the next ten) MoPay dogs were revealed by Yahoo Finance for March 2014:
Atlantic Power Corporation netted $634.39 (63.4%), based on estimates from four analysts. Please note that last month, before company management announced a 67% dividend cut, AT was listed as eighth in the top ten MoPay dogs at a $12 share price and these same four analysts were projecting a $13.86 annual mean target share price.
Gold Resource Corporation netted $486.49 (48.6%), based on estimates from two analysts.
Baytex Energy Corp. netted $280.09 (28%), based on estimates from ten analysts.
Pengrowth Energy netted $275.24 (27.5%) based on estimates from six analysts.
Armour Residential REIT netted $235.35 (23.5%), based on mean target price estimates from nine analysts.
Enerplus Corp. netted $231.93 (23.2%), based on mean target price estimates from seven analysts.
Horizon Technology Finance Corp. netted $207.55 (20.8%) to 2014, based on estimates from five analysts.
Vanguard Natural Resources netted $188.36 (18.8%), based on mean target price estimates from twelve analysts.
Gladstone Investment netted $132.82 (13.3%), based on mean target price estimates from two analysts.
Fifth Street Finance Corporation netted $126.48 (12.6%), based on estimates from eleven analysts.
The total 2014 net gain in dividend and price for all MoPay top ten dog stocks was projected as 16.2% from $10k invested. The total 2014 net gain in dividend and price for all MoPay next ten dog stocks was projected as 21.3% from $10k invested.
Monthly Pay Dividend Funds and Trusts For March
The thirty top monthly dividend paying (MoPay) funds and trusts listed above were culled from over 400 candidates then ranked by yields calculated as of March 14 to determine the Top Ten.
Ten monthly dividend funds and trusts showing the biggest yields for March featured eight funds and two trusts. The top two dog funds as revealed by Yahoo Finance data were by Cornerstone: Cornerstone Strategic Value Fund (NYSEMKT:CLM) and Cornerstone Progressive Return Fund (NYSEMKT:CFP). Two PIMCO funds placed third and seventh in the yield rankings, PIMCO High Income Fund (NYSE:PHK) and PIMCO Global StocksPLUS & Income (NYSE:PGP). Two AGIC funds placed fourth and sixth: AGIC Convertible and Income Fund II (NYSE:NCZ); AGIC Convertible & Income Fund (NYSE:NCV). The balance of the top ten funds and trusts were: Gamco Global Gold Natural Resources & Income Trust (NYSEMKT:GGN) in fifth; Pioneer High Income Trust (NYSE:PHT) in eighth; MFS Special Value Trust (NYSE:MFV) in ninth; Eaton Vance Enhanced Equity Inc. (NYSE:EOS) in the tenth slot.
Fund & Trust Dividend and Price Results vs. MoPay Top Ten Stocks
Below relative strengths for the top ten MoPay Dividend F&T Dogs by yield was graphed as of March 14, 2013 and compared to those of the top ten stocks. Ten periods of historic projected annual dividend history from $1000 invested in the ten highest yielding equities and the total single share prices of those ten equities created the data points for each period shown in blue for dividends and green for price.
Actionable Conclusion Four: MoPay Top Ten DiviDog Funds and Trusts Get Bullish Like Stocks
Charts showed MoPay dividend dog funds and trusts turning sharply bullish in the past month after wallowing a mixed bear market pattern. Since March 2012 projected dividend from 1k invested in each of the top ten funds and trusts jumped 21.4% while aggregate single share price of the ten over the same period declined .8%.
Over the past month, however, dividend declined 14.6% while price increased over 40%
The gap between aggregate single share price rising to meet projected dividend from $1k invested in those ten equities moved from 777.9% in April 2012 to 973.6% in March 2013.
Since April the top ten MoPay stocks projected dividend from $1k invested in each pup increased 11.2% while aggregate single share price rose 6.4%. The gap for the MoPay stocks shows a similar widening for the year. In April 2012 it measured 777.9% in March 2013 it stood at 818%.
As of March 14 the top MoPay fund and trust Dogs showed $101.36 or 9.15% more dividend (with equally bigger risk) at a $8.05 or 6.7% lower aggregate single share price than the MoPay stocks top ten.
Actionable Conclusion Five: Buy and Hold Monthly Dividend Paying Funds & Trusts, If You Dare
Stock analysts don't hazard guesses as to when or how fund and trust prices will rise. They are paid to gauge individual stocks, and a few funds and partnerships. Hence this monthly pay F&T dog diligence only revealed a list of funds and trusts to buy and hold if you dare. But the risk is dropping since the first of the year.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.
Disclosure: I am long ARR, AT, ERF, FSC, HRZN, PGH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.