Results from Yahoo Finance for monthly paying (mopay) dividend stocks tallied as of market closing prices August 16 compared with analyst mean target price results one year hence showed America Realty Capital Properties, Inc. (NASDAQ:ARCP), the New York headquartered diversified REIT that "principally invests in retail and office properties", flashed a 35.24% price upside. The 10 top mopay stock upsides ranged from 9.93% to 35.24%.
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 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, June, and July reader input all contributed to this article which compared and contrasted August 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.
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 August represented just three of the nine Yahoo market sectors. Top two dog stocks revealed by Yahoo Finance data were Javelin Mortgage Investment Corp. (NYSE:JMI), and Armour Residential REIT (NYSE:ARR). These were two of seven financial sector firms that dominated the list. The remaining five financial mopay dogs placed fourth, sixth, seventh, ninth, and tenth: Prospect Capital Corporation (NASDAQ:PSEC); Full Circle Capital Corp. (NASDAQ:FULL); Fifth Street Finance (NASDAQ:FSC); Horizon Technology Finance Corp. (NASDAQ:HRZN); Gladstone Capital Corporation (NASDAQ:GLAD).
The third slot in the top ten was filled by the lone utility on the list, Just Energy Group Inc. (NYSE:JE). Two mopay basic materials concerns, Linn Energy, LLC (NASDAQ:LINE), and its holding company, Linn Co., LLC (NASDAQ:LNCO) rounded out the list in fifth and eighth places.
Dividend vs. Price Results for MoPay Divi Stocks Compared to Dow Dogs
Relative strength for the top ten MoPay dividend dog stocks by yield was graphed below as of August 16, 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 dividends.
Actionable Conclusion (1): MoPay Dogs And Dow Cowed by Bears
MoPay dividend dogs retreated from a bear after July. Aggregate dividend from $10k invested as $1k in each of the top ten stocks increased at a rate of 9% since then while total single share price of those ten decreased 9% for that period.
For the Dow dogs, meanwhile, annual dividend from $1k invested in each of the top ten increased 3.6% since July, while aggregate single share price dropped 2.6%, continuing the bear track since June. 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, then shrunk to $153 or 41% in July, and kept compressing to $125 or 33% in August.
Actionable Conclusion Two (2): Wise Wall Street Wizards Revealed 24% 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 August 16, 2013 and those projected by analyst mean price target estimates to the same date in 2014.
Historic prices and actual dividends paid from $10,000 invested as $1K in each of 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 (n/a).
Yahoo projected a 9% lower dividend from $10K invested in the top ten mopay group while aggregate single share price was projected to increase by 17% 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 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. A negative beta number indicated the degree of a stock price movement opposite of market direction.
Actionable Conclusion (3): Analysts Forecast 2014 NEXT10 Mo Pay DiviDog Stock Net Gains over 16.4%
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, Atlantic Power Corporation (NYSE:AT) was the lone utility in the next ten list. Twelfth dog, Vanguard Natural Resources (NASDAQ:VNR), was one of two basic materials firms listed. The other basic materials firm, Pengrowth Energy (NYSE:PGH), placed sixteenth. Thirteenth dog, Student Transportation, Inc. (NASDAQ:STB) was the lone services stock on the list. Gladstone Commercial REIT (NASDAQ:GOOD) in fourteenth position was the best of six financial firms that included Gladstone Investment (NASDAQ:GAIN) in sixteenth place. Financial dogs, Solar Senior Capital Ltd. (NASDAQ:SUNS), Whitestone REIT (NYSE:WSR), Home Loan Servicing (NASDAQ:HLSS), and America Realty Capital Properties (ARCP) in the seventeenth to twentieth slots competed the next ten August mopay divi-dog list .
The next ten dogs showed a 12% lower dividend from $1k invested in each stock while share price for the next ten was projected by analysts to increase by 13.3%.
The number of analysts contributing to the mean target price estimate for each stock is noted in the next to the last 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 provided in the far right column on that 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 price movement opposite of market direction.
Actionable Conclusion (4): Analysts Forecast Ten MoPay Dogs to Net 16.4% to 45.5% Gains by August 2014
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
Armour Residential REIT netted $455.73 based on estimates from eight analysts plus dividends less broker fees. A Beta number was not available for ARR.
Linn Energy, LLC netted $440.83, based on dividends plus a mean target price estimate by thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 20% less than the market as a whole.
America Realty Capital Properties netted $402.72 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 33% opposite the market as a whole.
Linn Co., LLC netted $381.88 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 76% opposite the market as a whole.
Atlantic Power Corporation netted $279.50, based on dividend plus mean target price estimates from five analysts less broker fees. The Beta number showed this estimate subject to volatility 62% less than the market as a whole.
Horizon Technology Finance Corporation netted $237.54 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.
Vanguard Natural Resources netted $222.11 based on estimates from ten analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 10% greater than the market as a whole.
Fifth Street Finance netted $190.41 based on dividends plus mean target price estimate from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 1% greater than the market as a whole.
Gladstone Investment netted $177.77 based on a mean target price estimate from two analysts combined with projected annual dividend less broker fees. A Beta number was not available for GAIN.
Student Transportation, Inc. netted $164.38 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.
The average net gain in dividend and price was 29.53% on $1k invested in each of these ten mopay dogs. This gain estimate was subject to average volatility 65% 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 August
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 August 16 to determine the Top Ten.
Ten monthly dividend funds and trusts showing the biggest yields for August 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. A PIMCO fund placed fourth in the yield rankings, PIMCO High Income Fund (NYSE:PHK). 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; Helios Total Return Fund Inc. (NYSE:HTR) in tenth 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 August 16, 2013 and compared to those of the top ten stocks. Ten periods of projected annual dividend history from $10,000 invested as $1k in each of 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 dividend and green for price.
Actionable Conclusion (5): MoPay Top Ten DiviDog Funds, Trusts & Stocks Cowed By A Bears
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 5% while aggregate single share price of the ten over the same period dropped over 5.3% for the period.
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 959% in August 2013.
Since July the top ten mopay stocks were backed down by a bear as projected dividend from $1k invested in each pup increased 9.2% while aggregate single share price dropped 9.2%. The gap between aggregate single share price and dividend from $1k invested in each for the ten mopay stocks expanded. In July the gap was 790%. In August it expanded to 970%.
As of August 16 the top MoPay fund and trust dogs showed $69 or 5% less dividend at a $5 or 4% 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 mopay stocks has increased.
Disclosure: I am long ARR, AT, FSC, HRZN, PGH, 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.
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.