Results from Yahoo Finance tallied as of market closing prices July 19 compared with analyst mean target price results one year hence showed 10 top monthly pay dividend stocks exhibiting 9.25% to 31.42% price upsides.
The chart above used the one year mean target price set by brokerage analysts matched against July 19 closing price to compare ten mopay 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.
Monthly pay (MoPay) dividend dog stock lists reviewed since July 2012 prompted reader suggestions to include funds, trusts, and partnerships. A list of MoPay equities to buy and hold in September resulted from those reader suggestions 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. Another list factored December reader comments. January, February, March, April, May, and June reader input all contributed to this article which compared and contrasted July MoPay stock upside potential against high yield (and higher risk) buy and hold fund, trust and partnership constituents. Six actionable conclusions were drawn.
Monthly Pay Dividend Pros and Cons
Quarterly and annual pay dividend stockholders 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 and/or statement. If the equity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses. This advantage has been countered when companies suddenly cut monthly dividends to save cash and trigger a price crash.
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."
Many readers are offended by the term "dividend" applied to REITs, MLPs and hybrid financial institutions. For example, arbtrdr wrote,
"The only problem with this analysis is you are comparing companies of VERY different varieties. REITs pay no taxes and their distributions are classified as ordinary income and thus not subject to the 15% or 20% tax rate.\ MLPs also pay little no taxes at the corporate level, but instead have "distributions"... Comparing REITs, MLPs and regular corporations thus requires a financial analysis...not include[d].
Dogs of the Index Metrics Extracted Bargains
For this article thirty dividend equities plus thirty funds and trusts were culled from over 400 entities paying monthly returns. These were ranked as of July 19, 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.
July Monthly Pay Dividend Stocks
The ten monthly pay dividend equities showing the best yields for June represented just three of the nine Yahoo market sectors. Top dog stocks revealed by Yahoo Finance data were Javelin Mortgage Investment Corp. (NYSE:JMI), Armour Residential REIT (NYSE:ARR), Prospect Capital Corporation (NASDAQ:PSEC), and Full Circle Capital Corp. (NASDAQ:FULL), four of seven financial sector firms that dominated the list. The remaining three financial mopay dogs placed sixth eighth, and ninth: Fifth Street Finance (NASDAQ:FSC); Gladstone Capital Corporation (NASDAQ:GLAD); Horizon Technology Finance Corp. (NASDAQ:HRZN).
The fifth slot in the top ten was filled by the lone utility on the list, Just Energy Group Inc. (NYSE:JE). Two newcomer mopay basic materials concerns, Linn Energy, LLC (LINE), and its holding company, Linn Co., LLC (LNCO) rounded out the list in seventh and tenth places.
Dividend vs. Price Results for MoPay Divi Stocks
Relative strength for the top ten MoPay dividend dog stocks by yield was graphed below as of July 19, 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 (1): Mo Pay DiviDogs Chase Bulls
MoPay dividend dog stocks were charted in a decidedly bullish trend after June. Dividend from 1k invested in each of the top ten stocks dropped 3.3% while aggregate single share price of the ten popped up 66% in the past month. This change is largely attributable to LINE & LNCO coming onto the mopay dog list.
Actionable Conclusion Two (2): Wise Wall Street Wizards Revealed 19.5% Net Gain from Top 10 MoPay Dogs
Top ten dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of July 19, 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 from one analyst were not included.
Yahoo projected an 7.5% lower dividend from $10K invested in the top ten mopay group while aggregate single share price was projected to increase by 11% 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).
A beta (risk) ranking for each analyst rated stock was provided in the far right column on the above chart. A beta of 1 meant the stock's price would move with the market. Less than 1 showed lower than market movement. Higher than 1 showed greater than market movement.
Actionable Conclusion (3): Analysts Forecast 2014 NEXT10 Mo Pay DiviDog Stock Net Gains over 17%
Ten monthly dividend equities that showed the next best yields in July represented four of the nine Yahoo market sectors. The eleventh dog stock revealed by Yahoo Finance data, Vanguard Natural Resources (NASDAQ:VNR), was one of three basic materials firms listed. The other two basic materials firms, Pengrowth Energy (NYSE:PGH) , and Enerplus Corp. (NYSE:ERF), placed fifteenth and nineteenth. Twelfth dog, Atlantic Power Corporation (NYSE:AT) was the lone utility in the next ten list. Thirteenth dog, Student Transportation, Inc. (NASDAQ:STB) was the lone services stock on the list. Gladstone Investment (NASDAQ:GAIN) in fourteenth position was the best of five financial firms that included Gladstone Commercial REIT (NASDAQ:GOOD) and Solar Senior Capital Ltd. (NASDAQ:SUNS) in sixteenth and seventeenth places. Whitestone REIT (NYSE:WSR) was eighteenth. America Realty Capital Properties (ARCP) in the twentieth slot competed the next ten June mopay dividog list .
The next ten dogs showed a 13% lower dividend from $1k invested in each stock while share price for the next ten was projected by analysts to increase by 11%.
The number of analysts contributing to the mean target price estimate for each stock is noted in the far right column on the above charts. Three to nine analysts was considered optimal for a valid projection estimate.
A beta (risk) ranking for each analyst rated stock was also provided in the far right column on the above chart.
Actionable Conclusion (4): Analysts Forecast Ten MoPay Dogs to Net 16.8% to 48% Gains by July 2014
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
- Armour Residential REIT netted $480 based on estimates from nine analysts plus dividends less broker fees. A Beta number was not available for ARR.
- Atlantic Power Corporation netted $364.28, based on dividend plus mean target price estimates from three analysts less broker fees. The Beta number showed this estimate subject to volatility 68% less than the market as a whole.
- Linn Energy, LLC netted $350.63, based on dividends plus a mean target price estimate by thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 6% greater than the market as a whole.
- America Realty Capital Properties netted $295.04 based on a mean target price estimate from two analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 25% less than the market as a whole.
- Vanguard Natural Resources netted $225.65 based on estimates from eleven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 30% greater than the market as a whole.
- Linn Co., LLC netted $201.07 based on dividends plus the mean of annual price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 9% greater than the market as a whole.
- Pengrowth Energy netted $190.62 based on dividends plus mean target price estimate from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 44% greater than the market as a whole.
- Enerplus Corp. netted $187.38 based on a mean target price estimate from eight analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 49% greater than the market as a whole.
- Student Transportation, Inc. netted $174.31 based on dividends plus a mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.
- Horizon Technology Finance Corporation netted $168.46 based on dividends plus the mean of annual price estimates from five analysts less broker fees./ The Beta number showed this estimate subject to volatility 60% less than the market as a whole.
The average net gain in dividend and price was 26.37% on $1k invested in each of these ten mopay dogs. This gain estimate was subject to average volatility 13% less than the market as a whole.
Net gain estimates above did not factor-in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
The stocks listed above were suggested only as decent starting points for your mopay dividend stock purchase research process. These were not recommendations.
Monthly Pay Dividend Funds and Trusts For July
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 July 19 to determine the Top Ten.
Ten monthly dividend funds and trusts showing the biggest yields for July featured ten funds and no trusts. The top fund as revealed by Yahoo Finance data was Cornerstone Progressive Return Fund (NYSEMKT:CFP) which returned to the list as of July 8 after it suspended its rights offering June 24. Cornerstone Strategic Value Fund (NYSEMKT:CLM) was second. Gamco Global Gold Natural Resources & Income Trust (NYSEMKT:GGN) placed third. Two PIMCO funds placed fourth and tenth in the yield rankings, PIMCO High Income Fund (NYSE:PHK), and PIMCO Global Stocks PLUS & Income (NYSE:PGP). Two AGIC funds placed fifth and sixth: AGIC Convertible and Income Fund II (NYSE:NCZ); AGIC Convertible & Income Fund I (NYSE:NCV). The balance of the top ten funds and trusts were: First Trust/Aberdeen Global Opportunity Fund (NYSE:FAM) in seventh; Western Asset High Income Fund II (NYSE:HIX) in eighth; Guggenheim Strategic Opportunities (NYSE:GOF) in ninth completed the list.
Fund & Trust Dividend & 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 June 21, 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 (5): MoPay Top Ten DiviDog Funds and Trusts Cowed By A Bear Unlike Stocks
Charts showed MoPay dividend dog funds and trusts backed down by a bear since June. Projected dividend from 1k invested in each of the top ten funds and trusts increased 3.5% while aggregate single share price of the ten over the same period dropped over 5% for the month.
A gap between aggregate single share price of top ten mopay funds and trusts and their projected dividend from $1k invested in those ten equities increased from 854% in June to 940% in July 2013.
Since June the top ten mopay stocks went bullish as projected dividend from $1k invested in each pup decreased xx% while aggregate single share price soared up xx%. The gap between aggregate single share price and dividend from $1k invested in each for the ten mopay stocks shrunk. In June it stood at 1426%. In July is was 790%.
As of July 19 the top MoPay fund and trust dogs showed $25.44 or 2% more dividend at a $17.47 or 12.6% lower aggregate single share price than the MoPay stocks top ten.
Actionable Conclusion (6): Buy and Hold Monthly Dividend Paying Funds & Trusts, If You Dare
Stock analysts don't hazard guesses as to when or how much fund and trust prices will rise or fall. 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. However, the risk for an investment in mopay dividend funds and trusts has dropped since the first of the year while the risk for an investment in mo pay stocks has increased.
Disclosure: I am long AT, ARR, 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.
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.