This article reports fascinating facts from consumer goods sector stocks tracked down as of closing prices April 26 using dividend dog methodology. This report series started in the fall of 2011 by applying dog dividend methodology to reveal possible buy opportunities in each of eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes).
Recently the author supplemented Dow dividend dog theory picks from Yahoo sectors with one year mean target price estimates reported by Yahoo from broker analysts.
Below, the Arnold ConGo Selections for April were disclosed.
Dog Metrics Flushed Out 10 Top Consumer Goods Stocks
Top 10 consumer goods stocks showing the biggest dividend yields per the Yahoo screen as of April 26 represented six industries. Tops was Vector Group (NYSE:VGR), one of five firms from the cigarettes industry. Other top 10 dogs in the same cigarettes industry group were: Lorillard, Inc (NYSE:LO), fourth, Reynolds (NYSE:RAI) fifth; Altria (NYSE:MO) sixth; Philip Morris International (NYSE:PM) ninth. The only business equipment firm listed, Pitney Bowes (NYSE:PBI) was second dog. The one personal products firm listed, CCA Industries, Inc. (NYSEMKT:CAW), was third. Ennis, Inc. (NYSE:EBF), an office supplies firm, was slotted seventh. Representing packaged goods, B&G Foods, Inc. (NYSE:BGS) was eighth. Furniture firm Leggett & Platt, Inc. (NYSE:LEG) placed 10th.
Dividend vs. Price Results Compared to Dow Dogs
Below is a graph of the relative strengths of the top 10 consumer goods dogs by yield as of market close 4/26/2013 compared to those of the Dow. Historic projected annual dividend history from $1000 invested in each of the 10 highest yielding stocks and the total single share price of those 10 stocks created the data points shown in green for price and blue for dividends.
Actionable Conclusion (1): ConGo Dogs Dogs Flash Mixed Signal as Dow Stays Bullish
April's consumer goods collection of dividend payers continued a bullish price course set since January. Aggregate dividend from $10k invested in each of the top 10 ConGo stocks, however, rose (bearishly) at a rate of 12.8% since March, while total single share price popped up (bullishly) 4.5% in that period.
Meanwhile, the Dow stayed totally bullish as prices popped up 7% while dividends sank 3.8%. The Dow extended an overbought condition as aggregated single share price exceeded dividend from $1k invested in each stock by $140.52 or 38%.
Since sector dogs are not the blue chip high quality equivalents of the Dow list, an additional gauge of upside potential was added to the simple high yield metric used to sniff out bargains.
Wall Street Wizard Wisdom Was Weighed
One year mean target price set by analysts multiplied by the number of shares in a $1k investment were used to compare nine stocks showing the highest upside price potential into 2014 out of 20 selected by yield. The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts was considered optimal for a valid mean target price estimate.
Actionable Conclusion Two (2): Analysts See 7.88% Net Gain from Top 20 Dogs Come 2014
Top 20 dogs for the consumer goods sector were graphed below to show relative strengths by dividend and price as of April 26, 2013 and those projected by analyst mean price target estimates to the same date in 2014.
A hypothetical $1000 investment in each equity was divided by the current share price to find the number of shares purchased. The shares number was then multiplied by projected annual per share dividend amounts to find the dividend return. Thereafter, the analyst mean target price was used to gauge the stock upsides to 2014.
Historic prices and actual dividends paid from $1000 invested in the 10 highest yielding stocks and the aggregate single share prices of those 20 stocks divided by 2 created the data points for 2013. Projections based on estimated increases in dividend amounts from $1000 invested in the 20 highest yielding stocks and aggregate one year analyst target share prices from Yahoo Finance divided by 2 created the 2014 data points, green for price and blue for dividends.
Yahoo projected a 5.8% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by 2.3% in the coming year.
The number of analysts contributing to the mean target price estimate for each stock was noted in the last column on the charts. Three to nine analysts was considered optimal for a valid projection estimate. Estimates provided by one analyst were not applied (n/a).
Actionable Conclusion Three (3): Analysts Forecast 2014 ConGo DiviDog Stock Net Gains of 3.8% to 37.9%
Nine probable profit generating trades revealed by Yahoo Finance for 2014 were:
Ennis Inc. netted $379.86, based on dividends plus mean target price estimate from five analysts less broker fees;
Pitney Bowes netted $143.52, based on dividends plus a mean target price estimate by four analysts less broker fees;
ConAgra Foods, Inc. (NYSE:CAG) netted $126.13, based on estimates from twelve analysts combined with projected annual dividend less broker fees;
MeadWestvaco Corporation (MWV) netted $115.71 based on estimates from twelve analysts plus dividends less broker fees;
Lorillard netted $87.17 based on a mean target price estimate from eleven analysts combined with projected annual dividend less broker fees;
Procter & Gamble netted $83.50 based on dividends plus a mean target price estimate from eighteen analysts less broker fees;
B&G Foods, Inc. netted $64.53 based on estimates from five analysts plus dividends less broker fees;
Philip Morris International netted $49.04 based on the mean of target price estimates from sixteen analysts plus dividends less broker fees;
Leggett & Platt netted $38.62 based on estimates from three analysts plus dividends less broker fees;
The average net gain in dividend and price less broker fees was 12.1% on $1k invested in each of these nine dogs.
The stocks listed above are suggested only as decent starting points for your consumer goods dividend stock purchase research process. These are not recommendations.
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 DD, GE, INTC, JNJ, MCD, MSFT, PFE, T, VZ. 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.