Price results from consumer goods sector stocks calculated as of September 30, 2013 were compared to analyst mean target price projections one year hence. The resulting chart from that data shown below featured ten stocks exhibiting 8% to 22% price upsides. Leggett & Platt, Incorporated (LEG) the Carthage, MO based home furnishings and fixtures industry firm with 8.3% showed the lowest upside of those ten. ConAgra Foods, Inc. (CAG) an Omaha, NE based processed and packaged goods industry firm exhibited a 21.69% price upside to lead the sector.
Since the fall of 2011 this report series applied dog dividend methodology to uncover possible buy opportunities in each of eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes).
Below, the Arnold ConGo Selections for September were disclosed.
Dog Metrics Dug Out Ten Top Consumer Goods Stocks by Yield
Top ten consumer goods stocks showing the biggest dividend yields per the Yahoo screen as of September 30 represented six industries. The top slots were taken by the five firms representing the cigarettes industry: Vector Group (VGR) was tops; followed by Altria (MO); Reynolds (RAI); Lorillard, Inc (LO); Philip Morris International (PM). The only business equipment firm listed, Pitney Bowes (PBI) was sixth dog. Representing auto parts, Superior Industries International (SUP) was seventh. The food - major diversified representative, Kraft Foods Group, Inc. (KRFT) placed eighth. Home furnishings and fixtures firm, Leggett & Platt, Incorporated was ninth. A tobacco products firm, Universal Corporation (UVV) placed tenth.
Dividend vs. Price Results Compared to Dow Dogs
The graph below of relative strengths of the top ten consumer goods dogs by yield as of market close 9/30/2013 compared to those of the Dow was prepared to show projected annual dividend history from $10,000 invested as $1k in each of the ten highest yielding stocks along with the total single share price of those ten stocks with the data points shown in green for price and blue for dividends.
Actionable Conclusion (1): ConGo Dogs Bearish as Dow Got Bullish
Consumer goods dividend payers concluded a bullish price course set between June and August. Total single share price dropped 3% in that period. Aggregate dividend from $10k invested in each of the top ten ConGo stocks, increased at a rate of 0.7%
For the Dow dogs, meanwhile, annual dividend from $10k invested as $1K in each of the top ten dropped 1.5% since August, while aggregate single share price hopped up 6%, ending a bear track since June. Dow dogs increased 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, compressed to $125 or 33% in August then expanded to $161 or 43% for September.
To quantify the top dog rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential and so were added to the simple high yield "dog" metric used to dig out bargains.
Actionable Conclusion (2): Wall Street Wizard Wisdom Weighed Over 9.7% Net Gain from Top 20 ConGo Dogs Come 2014
Top twenty dogs for the consumer goods sector were graphed below to show relative strengths by dividend and price as of September 30, 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 upsides to 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 the 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 6.5% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by 8% 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. A negative beta number indicated the degree of a stocks movement opposite of market direction.
Actionable Conclusion (3): Analysts Forecast 10 ConGo DiviDog Stock Net Gains of 10.2% to 22.9% By September 2014
Four of the ten top dividend yielding ConGo dogs were verified as being among the ten gainers for the coming year based on analyst 1 year target prices. So this month the dog strategy for consumer goods as graded by Wall St. wizards was 40% accurate.
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
ConAgra Foods, Inc. netted $229.84, based on dividends plus a mean target price estimate by twelve analysts less broker fees. The Beta number showed this estimate subject to volatility 52% less than the market as a whole.
Ennis Inc. (EBF) netted $207.20, based on dividends plus mean target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to volatility 36% more than the market as a whole.
Unilever NV (UN) netted $159.77, based on estimates from two analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.
Unilever plc (UL) netted $150.72 based on estimates from two analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 33% less than the market as a whole.
Procter & Gamble (PG) netted $132.56 based on dividends plus a mean target price estimate from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole.
Philip Morris International netted $130.56 based on the mean of target price estimates from fifteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.
Mattel, Inc. (MAT) netted $130.53 based on estimates from ten analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 42% less than the market as a whole.
Kraft Foods Group, Inc. netted $127.48 based on a mean target price estimate from seventeen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.
Altria Group netted $58.30 based on estimates from eighteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.
Leggett & Platt Incorporated netted $102.42 based on estimates from two analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.
The average net gain in dividend and price less broker fees was over 14.9% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 28% less than the market as a whole.
The stocks listed above are suggested only as decent starting points for your consumer goods dividend stock purchase research process. These are not recommendations.
These gains as reported do not factor-in any tax problems resulting from distributions. Consult your tax advisor regarding the source of "dividends" from any investment.
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.