Results from the NASDAQ 100 Index calculated as of July 29, 2013 projecting price upside results one year hence showed Apple, Inc. (AAPL) with a nearly 20% upside. Six more top yielding NASDAQ stocks showed double digit percentage one year price gains. Avago Technologies (AVGO) had a 16.23% gain; Wynn Resorts (WYNN) dealt a 14.42% gain; Seagate Technology (STX) spun a 14.27% gain; Microchip Technology (MCHP) flashed a 13.77% gain; Mattel (MAT) swelled 11.45%; Microsoft (MSFT) managed a 10.4% gain.
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 NASDAQ 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.
This article reported results of the NASDAQ 100 Index 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 1000; NASDAQ 100; 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, are the Arnold NASDAQ 100 Index top dog selections for July were disclosed step by step.
Dog Metrics Graded NASDAQ 100 Stocks by Yield
NASDAQ states, "The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies."
Just three of nine sectors were represented in the top ten NASDAQ dogs by yield as of July 29 per IndexARB.com data. Technology had seven firms in the top ten showing high forward looking yields. Vodafone (VOD) claimed the top spot. The other six technology firms in declining order were: Garmin (GRMN); Seagate Technology ; Intel (INTC); Maxim Integrated Products (MXIM); Microchip Technology ; CA Technologies (CA). The remaining two NASDAQ high yield sectors for June included two consumer goods representatives, Kraft Foods Group, Inc. (KRFT), and Mattel . One service firm, Paychex (PAYX) filled out the top ten NASDAQ 100 dogs.
Dividend vs. Price Results Compared to Dow Dogs
Below is a graph of the relative strengths of the top ten NASDAQ 100 dogs by yield as of market close 7/29/2013 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): NASDAQ 100 Bullish & Dow Dogs Were Not
NASDAQ 100 top July dividend payers continued a bullish price course set since November, 2012. Aggregate dividend from $10k invested in each of the top ten NASDAQ 100 stocks has dropped at a 13.7% rate since November, while total single share price has increased over 38.3% in that period. In the past month NASDAQ 100 top ten dog dividend dropped 1.45% while price rose 1.3%.
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 NASDAQ 100 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 cull bargains.
Actionable Conclusion (2): Wall Street Wizard Wisdom Weighed to Reckon Nearly 8.5% Net Gain from Top 20 NASDAQ 100 Dogs By 2014
Top twenty dogs from the NASDAQ 100 index were graphed below to show relative strengths by dividend and price as of July 29, 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% lower dividend from $10K invested in this group while aggregate single share price was projected to increase over 10.8% in the coming year. The number of analysts contributing to the mean target price estimate for each stock was noted in the next 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 number indicated the degree of a stocks movement opposite of market direction.
Actionable Conclusion Three: Analysts Forecast 10 NASDAQ 100 DiviDogs to Net 6.5% to 20.5% By July 2014 With Apple Ahead
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were led by Apple's upside:
- Apple, Inc. (AAPL) netted $204.79 based on dividends plus mean target price estimate from forty-eight analysts less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.
- Avago Technologies netted $169.94 based on a mean target price estimate from nineteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 8% more than the market as a whole.
- Seagate Technology netted $163.87, based on dividend plus mean target price estimates from nineteen analysts less broker fees. The Beta number showed this estimate subject to volatility 205% greater than the market as a whole.
- Wynn Resorts netted $154.68 based on estimates from twenty-three analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 70% more than the market as a whole.
- Microchip Technology netted $154.04 based on dividends plus mean target price estimate from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 19% more than the market as a whole.
- Mattel netted $130.25 based on dividends plus the mean of annual price estimates from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 42% less than the market as a whole.
- Microsoft netted $116.97 based on a mean target price estimate from thirty-one analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.
- Maxim Integrated Products netted $93.56 based on estimates from twenty-five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 14% greater than the market as a whole.
- KLA-Tencor (KLAC) netted $82.41 based on dividends plus a mean target price estimate by fifteen analysts less broker fees. The Beta number showed this estimate subject to volatility 54% greater than the market as a whole.
- Garmin netted $65.46 based on dividends plus mean target price estimate from fifteen analysts less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.
The average net gain in dividend and price was over 13.4% on $1k invested in each of these ten dogs. This gain estimate was subject to average volatility 29% greater 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.