Results from Yahoo Finance tallied as of market close prices July 25 compared with analyst mean target price projections one year hence showed Coca Cola Co. (NYSE:KO) the soft drink beverages industry firm from the consumer goods market sector exhibiting a 12.12% price upside to lead the S&P 500 Aristocrats Index.
The chart above used the one year mean target price set by brokerage analysts matched against June 24 closing price to compare ten sector 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.
This article reported results of the S&P Aristocrats as one of fourteen in a series of index-specific articles devoted to dividend yield and price upside results. Prompted by Seeking Alpha reader requests, the series has supplied results for these stock indices: Dow 30; Barron's 15 Gems; Russell 2000; S&P 500; S&P Aristocrats; Russell 50; NASDAQ; NYSE International 100; Mergent Dividend Achievers; Champions; Contenders; Challengers; Carnevale's Power 25; Carnevale's Super 29.
This report presumed yield (dividend / price) dividend dog methodology applied to any index and compared that index side by side with the Dow. Below, the Arnold S&P 500 Aristocrats Index top dog elections for July were disclosed step by step.
Dog Metrics Sorted S&P 500 Aristocrats Index Stocks by Yield
McGraw Hill, publisher if this index, states, "The S&P 500® Dividend Aristocrats index measures the performance of large cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years."
July Aristocrats placed six of nine business sectors into the top ten by yield. The lone technology dog, AT&T (NYSE:T) led the pack. One of two financial firms, HCP, Inc. (NYSE:HCP), was second. The other financial, Cincinnati Financial (NASDAQ:CINF), placed sixth. The lone utility, Consolidated Edison Inc. (NYSE:ED) was third. Three consumer goods firms placed fourth, seventh, and eighth: Leggett & Platt (NYSE:LEG), Clorox Co. (NYSE:CLX), and Kimberly-Clark (NYSE:KMB). Healthcare firm, AbbVie Inc. (NYSE:ABBV) placed fifth. Two service firms in ninth and tenth places, Sysco Corporation (NYSE:SYY), and McDonald's Corp. (NYSE:MCD) completed the top ten S&P 500 Aristocrats dog list by yield.
Dividend vs. Price Results Stacked Up Against Dow Dogs
Below is a graph of the relative strengths of the top ten Aristocrats dogs by yield as of market close 7/25/2013 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): S&P 500 Bullish, Dow Dogs Retreat But Both Stay Overbought
The July Aristocrats collection of dividend payers continued a bullish course set since November, 2012. Aggregate dividend from $10k invested in each of the top ten Aristocrats stocks dropped at a 25.5% rate since November, while total single share price increased nearly 27% in that period. In the past month S&P 500 Aristocrats top ten dog dividend dropped .09% while price rose 3.9%. The Aristocrats dogs increased their overbought condition as aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each by about $206 or 55%.
For the Dow dogs, meanwhile, annual dividend from $1k invested in each of the top ten increased just 0.03% since June, while aggregate single share price dropped over 8%. Dow dogs decreased their overbought condition in which aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten by over $198 or 53% in June was shrunk to $152.51 or 41% in July.
Since the S&P 500 Aristocrats index dogs are blue chip high quality equivalents of the Dow list, (but including utilities) an additional gauge of upside potential was added to the simple high yield metric used to detect bargains.
Actionable Conclusion Too (2): Wall St. Wizards Fathom 5.47% Net Gain from Top 20 Aristocrats Dogs By 2014
Top twenty dogs from the S&P 500 Aristocrats index were graphed below to show relative strengths by dividend and price as of July 25, 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 2.8% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by 2.6% in the coming year. The number of analysts contributing to the mean target price estimate for each stock was noted in the ext to the last column on the charts. Three to nine analysts was considered optimal for a valid estimate.
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. A negative beta numbers indicated the degree of a stocks movement opposed to market direction.
Actionable Conclusion Three (3): Analysts Suspect 10 S&P 500 Dividend Aristocrats Dogs to Net 3% to 12.8% By July 2014
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
Coca-Cola Co (KO) netted $128.63 based on dividends plus a mean target price estimate from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 67% less than the market as a whole.
HCP Inc. (HCP) netted $120.58 based on a mean target price estimate from twelve analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.
AbbVie Inc. (ABV) netted $90.99 based on target price estimates from ten analysts plus dividends less broker fees. A Beta number was not yet available for ABV.
McDonald's Corp. (MCD) netted $89.14 based on dividends plus the mean of annual price estimates from twenty-one analysts less broker fees. The Beta number showed this estimate subject to volatility 75% less than the market as a whole.
AT&T Inc. (T) netted $88.86 based on dividends plus a mean target price estimate from twenty-three analysts less broker fees. The Beta number showed this estimate subject to volatility 70% less than the market as a whole.
PepsiCo Inc. (NYSE:PEP) netted $81.03 based on dividends plus a mean target price estimate from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 70% less than the market as a whole.
Procter & Gamble (NYSE:PG) netted $45.63 based on dividends plus a mean target price estimate from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 69% less than the market as a whole.
Consolidated Edison Inc. (ED) netted $45.63 based on dividends plus a mean target price estimate from nineteen analysts less broker fees. The Beta number showed this estimate subject to volatility 3% opposite the market as a whole.
Chevron Corp (NYSE:CVX) netted $45.28, based on dividend plus mean target price estimates from twenty-one analysts less broker fees. The Beta number showed this estimate subject to volatility 16% more than the market as a whole.
Emerson Electric Co. (NYSE:EMR) netted $31.21 based on dividends plus a mean target price estimate from twenty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 63% more than the market as a whole.
The average net gain in dividend and price was just over 7.8% on $1k invested in each of these ten dogs. This gain estimate was subject to average volatility 53% less than the market as a whole.
The stocks listed above were suggested only as decent starting points for your index dog dividend stock purchase research process. These were 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, 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.