Results from the Carnevale Power 25 Index calculated as of June 14, 2013 projecting gain results one year hence showed industrial and service sector firms Republic Services Inc. (RSG), R.R. Donnelley & Sons (RRD), and McGraw-Hill Companies (MHFI) with 12.5% to 14% price upsides. Two other top yielding Power 25 stocks showed near double digit percentage one year price gains. Chevron Corporation (CVX) and Alliance Resource Partners (ARLP) showed over 9.9% gains.
The chart above used one year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment to compare ten Carnevale Power 25 Index 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 were considered optimal for a valid mean target price estimate.
Below, are the Arnold Carnevale Power 25 Index top dog selections for June.
Dog Metrics Ranked Carnevale Power 25 Stocks by Yield
Respected stock analyst, Seeking Alpha blogger, and creator of Fastgraphs, Chuck Carnevale, published Our 25 Dividend Growth Stocks Are Dirt Cheap in November 2011. He listed top 25 blue chip dividend growth stocks that: (1) were available at current valuations; (2) were significantly below their historical norms; (3) remained profitable through the great recession of 2008 and 2009.
Carnevale's top ten Power 25 stocks were ranked by yields calculated as of June 14 to reveal the top ten. Price and dividend data was sourced from Yahoo.com.
The top ten included firms representing seven of nine market sectors. The top stock as revealed by Yahoo Finance data was one of two in the service sector, RR Donnelley & Sons, while Sysco Corporation (SYY), the other service firm, placed seventh.
The balance of the top ten Power 25 included: two basic materials, Alliance Resource, second dog, and Chevron Corp. in sixth; the lone technology representative was Intel Corporation (INTC), in third place. Two healthcare firms, Novartis AG (NVS) placed fourth, and Johnson & Johnson (JNJ) slotted eighth. One utility, NextEra Energy (NEE), ranked sixth. A single consumer goods firm, Procter & Gamble (PG), placed ninth. The lone industrial goods firm, General Dynamics Corp. (GD), was tenth representing market sectors.
The full list of Carnevale's Power 25 stocks had five service, five healthcare, three consumer goods, one financial, three basic materials, five industrial, one utility, one technology and no conglomerates representing market sectors.
Dividend vs. Price Results Compared to Dow Dogs
Below is a graph of the relative strengths of the top ten Carnevale Power 25 dogs by yield as of market close 6/14/2013 compared to those of the Dow. Historic projected annual dividend history from $1000 invested in each of the ten highest yielding stocks and the total single share prices of those ten stocks created the data points shown in green for price and blue for dividend.
Actionable Conclusion (1): Carnevale Power 25 and Dow Dogs Both Bullish
The Carnevale Power 25 top June dividend payers continued a bullish course. In the past month, Power 25 top ten dog dividend dropped 6% while price rose over 13.6%. The Power 25 dogs enlarged their overbought condition as aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten by over $255 or 64%.
For the Dow dogs, meanwhile, projected annual dividend from $1k invested in each of the top ten dropped over 2.2% since April, while aggregate single share price popped up over 13.6%. Dow dogs increased their overbought condition as aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten by over $198 or 53%.
Since Carnevale Power 25 dogs attempt to achieve all 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 cull bargains.
Actionable Conclusion (2): Wall Street Wizard Wisdom Weighed to Calculate Over 6.84% Net Gain from Top 20 Carnevale Power 25 Dogs
Top twenty dogs from Chuck Carnevale's Power 25 index were graphed below to show relative strengths by dividend and price as of June 14, 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 price upsides and net gains including dividends less broker fees as of 2014.
Historic prices and actual dividends paid from $1000 invested in the ten highest yielding stocks and the aggregate single share prices of those twenty stocks divided by 2 created data points for 2013. Projections based on estimated increases in dividend amounts from $1000 invested in the twenty 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 4.8% lower dividend from $10K invested in this group while aggregate single share price was projected to increase nearly 4.8% 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 estimate.
Actionable Conclusion (3): Analysts Forecast 10 Carnevale Power 25 Dogs to Net 6.5% to 18.4% By June 2014
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
R.R. Donnelley & Sons netted $183.65 based on dividends plus mean target price estimate from five analysts less broker fees;
Republic Services Inc. netted $146.76 based on dividends plus mean target price estimate from five analysts less broker fees;
Alliance Resource Partners LP netted $143.57, based on dividends plus a mean target price estimate by seven analysts less broker fees;
McGraw-Hill Companies netted $125.44 based on dividends plus mean target price estimate from seven analysts less broker fees;
Chevron Corporation netted $112.94 based on estimates from twenty-two analysts plus dividends less broker fees;
Procter & Gamble Co. netted $94.57 based on a mean target price estimate from eighteen analysts combined with projected annual dividend less broker fees;
Pepsico Inc. (PEP) netted $86.42, based on dividend plus mean target price estimates from fifteen analysts less broker fees;
NextEra Energy Inc. netted $70.43 based on estimates from twenty analysts plus dividends less broker fees;
Johnson & Johnson netted $64.80 based on dividends plus the mean of annual price estimates from nineteen analysts less broker fees;
AFLAC Inc. (AFL) netted $64.51 based on a mean target price estimate from nineteen analysts combined with projected annual dividend less broker fees.
The average net gain in dividend and price was over 10.9% on $1k invested in each of these ten dogs.
The stocks listed above were suggested only as decent starting points for your index dog dividend stock purchase research process. These were not recommendations.
Seeking Alpha reader requests prompted this series of index-specific articles reporting dividend yield plus price upside results for twelve popular stock indices: Dow 30; S&P 500; S&P Aristocrats; Russell 50; NASDAQ; NYSE International 100; NASDAQ (formerly Mergent) Dividend Achievers; Champions; Contenders; Challengers; Carnevale's Power 25; Carnevale's Super 29.
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.