Results from Chuck Carnevale's Super 29 Index calculated as of July 30, 2013, projecting gain results one year hence showed Connecticut Water Service (CTWS) led the index with a 16.24% price upside.
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 Super 29 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 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 Carnevale Super 29 Index top dog selections for July were reported.
Dog Metrics Sorted Carnevale Super 29 Index Stocks by Yield
April 2, 2012, Seeking Alpha blogger, respected stock analyst and creator of Fastgraphs, Chuck Carnevale, published 29 Dividend Champions That Beat The Market, Inflation And 2 Recessions Since 2001. He listed top 29 blue chip dividend growth stocks that: (1) consistently raised dividends for 37 years (or more); (2) were at or below fair market value in 2001; (3) outperformed the S&P 500 on a total return basis.
Carnevale's Super 29 top ten stocks showing the biggest projected dividend yields as of July 30, 2013, included firms representing five of nine market sectors. Top stock revealed by Yahoo Finance data were the only services firm in the top ten, Bowl America Class A (NYSEMKT:BWL.A). The lone representative of the financial sector, United Bankshares Inc. (UBSI), was second dog.
Fourth dog was one of three utilities, Consolidated Edison (NYSE:ED). The other utilities, Connecticut Water Service Inc. (NASDAQ:CTWS), and California Water Service (NYSE:CWT), were seventh and tenth on this top ten list. The balance of the top ten consisted of three consumer goods firms, Leggett & Platt Inc. (NYSE:LEG) in fifth, Diebold Inc. (NYSE:DBD) in sixth, and Procter & Gamble Co. (NYSE:PG) in ninth to complete the top ten Super 29 dogs.
Chuck's full list of 29 stocks has four service, two healthcare, six consumer goods, two financial, three basic materials, six industrial goods, four utilities, no technology, and one conglomerate representing eight of nine market sectors.
Dividend vs. Price Results Compared to Dow Dogs
Below is a graph of the relative strengths of the top ten Carnevale Super 29 dogs by yield as of market close 7/30/2013 compared to those of the Dow. Historic projected annual dividend history from $1,000 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 Super 29 Index Dogs Bullish as Dow was Cowed by Bear
The Carnevale Super 29 top July dividend payers maintained a bullish price course. In the past month aggregate single share price popped up 4%. To reinforce the message, aggregate dividends from $10k invested in each of those top ten dogs dropped almost 5% since June. Aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten by over $23 or 6% in July signaling an overbought condition.
For the Dow dogs, meanwhile, annual dividends 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 dividends from $1k invested in each of the ten by over $198 or 53% in June shrunk to $152.51 or 41% in July.
Since Carnevale Super 29 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 Estimated Over 5.4% Net Gain from Top 20 Carnevale Super 29 Dogs In 2014
Top twenty dogs from Chuck Carnevale's Super 29 index were graphed below to show relative strengths by dividend and price as of July 30, 2013, and those projected by analyst mean price target estimates to the same date in 2014.
A hypothetical $1,000 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 $1,000 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 $1,000 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 0.4% lower dividend from $10K invested in this group while aggregate single share price was projected to increase nearly 3% 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 were 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 stock's movement opposite of market direction.
Actionable Conclusion (3): Analysts Forecast 9 Carnevale Super 29 Dogs to Net 4% to 17% By June 2014
Nine probable profit generating trades revealed by Yahoo Finance for 2014 were:
Connecticut Water Service (CTWS) netted $174.62, based on dividends plus a mean target price estimate by two analysts less broker fees. The Beta number showed this estimate subject to volatility 56% less than the market as a whole.
Procter & Gamble Co (PG) netted $91.51 based on a mean target price estimate from sixteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 66% less than the market as a whole.
Stanley Black & Decker (NYSE:SWK) netted $83.81 based on dividend plus mean target price estimates from eleven analysts less broker fees. The Beta number showed this estimate subject to volatility 87% greater than the market as a whole.
Nucor Corp.. (NUE) netted $83.44 based on dividends plus mean target price estimates from fifteen analysts less broker fees. The Beta number showed this estimate subject to volatility 40% greater than the market as a whole.
RPM International (NYSE:RPM) netted $78.55 based on dividends plus the mean of annual price estimates from six analysts less broker fees. The Beta number showed this estimate subject to volatility 30% more than the market as a whole.
ABM Industries Inc. (NYSE:ABM) netted $70.42 based on dividends plus mean target price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 4% greater than the market as a whole.
Mine Safety Appliances Co. (NYSE:MSA) netted $67.66 based on estimates from four analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.
VF Corp. (NYSE:VFC) netted $50.12 based on a mean target price estimate from five 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.
Illinois Tool Works (NYSE:ITW) netted $39.76 based on dividends plus mean target price estimate from seven analysts less broker fees. The Beta number more than the market as a whole.
It should be noted that each of the top four Power 29 dogs by yield were all projected to throw more annual dividends than the entire net gain forecast for ITW. They were not listed here because they lacked a price upside.
The average net gain in dividend and price was over 7.3% on $1k invested in each of these ten dogs. This gain estimate was subject to average volatility 4% 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.
Results for Carnevale's Super 29 Index were 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.
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.