Results from Yahoo Finance tallied for NASDAQ 100 Index members as of market closing prices October 17 were compared to analyst mean target price projections one year hence. The resulting chart of that data shown below turned up just six stocks exhibiting 3% to 16% price upsides. Analog Devices, Inc. (ADI) a Norwood, MA based circuit board technology firm with 2.96% showed the lowest upside of those six. Cisco Systems (CSCO) the San Jose, CA based network technology purveyor exhibited a 15.94% price upside to lead the NASDAQ 100 Index.
On the downside, five stocks exhibited pending price slumps of 5% to 8% based on 1 yr. analyst mean target pricing. Vodafone Group plc (VOD) presented the weakest 5.09% bearish sentiment while Paychex, Inc. (PAYX) weighed 8.17% to the downside to most tempt hungry bears.
The charts above used one-year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment to compare NASDAQ 100 Index stocks showing the highest upside and downside price potential into 2014 out of 20 selected by yield. The number of analysts providing price estimates was noted after the name of 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; S&P 500; S&P Aristocrats; Russell 1000; NASDAQ 100; NYSE International 100; Dividend Achievers; Champions; Contenders; Challengers; Carnevale's Power 25; Carnevale's Super 29; Russell 2000.
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 October disclosed step by step.
Dog Metrics Sorted NASDAQ 100 Stocks by Yield
"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 October 17 per IndexARB.com data. Technology had seven firms in the top ten showing high forward-looking yields. Vodafone claimed the top spot. The other six technology firms in declining order were: Intel (INTC), Garmin (GRMN), Microchip Technology (MCHP), Maxim Integrated Products (MXIM), Seagate Technology (STX), and Cisco Systems. The remaining two NASDAQ high yield sectors for June included two consumer goods representatives, Kraft Foods Group, Inc. (KRFT), and Mattel (MAT). One service firm, Paychex filled out the top ten NASDAQ 100 dogs.
Dividend vs. Price Results Compared to Dow Dogs
The graph below displays the relative strengths of the top ten NASDAQ 100 dogs by yield as of market close 10/17/2013 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 Was Bullish as Dow Dogs Dithered
NASDAQ 100 top October dividend payers continued a bullish price course set since November 2012. Total single share price has increased over 48% in that period. Aggregate dividend from $10k invested as $1k in each of the top ten NASDAQ 100 stocks has dropped at a 21% rate since November. In the past month NASDAQ 100 top ten dog dividend dropped 4% while price rose 1%. The September index showed as overbought when aggregate single share price for the top ten dogs exceeded dividend from $10k invested as $1k in each dog. The excess was $5. Came October, the excess increased to $23 or 6% over dividend.
For the Dow dogs, meanwhile, projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs dropped just 0.6% since September, while aggregate single share price swooned 11%, ending a brief bullish track. The Dow dogs overbought condition in which aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten shrank. The overhang was $198 or 53% in June, then shrunk to $153 or 41% in July, compressed to $125 or 33% in August then expanded to $161 or 43% for September, then shrank down to $111 or 30% for October.
To quantify the top dog rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential and was added to the simple high yield "dog" metric used to dig out bargains.
Actionable Conclusion Too (2): Wall St. Wizards Want 4.8% 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 October 17, 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 $20,000 invested as $1k in each of the 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 dividend graphed from the plus row in the chart below exhibiting the 4.8% net gain.
Factoring in a 1.3% loss from the five negative net stocks introduced above, a net net gain of 3.5% results.
Yahoo projected a 2% lower dividend from $10K invested in this group while aggregate single share price was projected to increase over 7% 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 stock's movement opposite of market direction.
Actionable Conclusion (3): Analysts Forecast 6 NASDAQ 100 DiviDogs to Net 3% to 16% By October 2014
Four of the six top dividend yielding NASDAQ 100 dogs were verified as being among the top ten gainers for the coming year based on analyst 1-year target prices. So this month the dog strategy as graded by Wall St. wizards is 67% accurate.
The six probable profit generating trades revealed by Yahoo Finance for 2014 were led by Cisco's upside:
Cisco Systems, Inc. netted $172.94 based on dividends plus mean target price estimate from thirty-three analysts less broker fees. The Beta number showed this estimate subject to volatility 38% more than the market as a whole.
Mattel netted $133.90 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 36% less than the market as a whole.
Microchip Technology netted $131.09 based on dividends plus mean target price estimate from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 8% more than the market as a whole.
Kraft Foods Group, Inc. netted $102.09 based on dividends plus mean target price estimate from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 21% less than the market as a whole.
Apple, Inc. (AAPL) netted $90.91 based on a mean target price estimate from forty-eight analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 42% less than the market as a whole.
Analog Devices, Inc. netted $40.64 based on a mean target price estimate from twenty-four analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.
The average net gain in dividend and price was nearly 11.2% on $6k invested as $1k in each of these six dogs. This gain estimate was subject to average volatility 4% less than the market as a whole.
Actionable Conclusion (4): (Bear Alert) Analysts Forecast 5 NASDAQ 100 DiviDogs to Post Net Losses of 2.8% to 6.7% By October 2014
Five probable losing trades revealed by Yahoo Finance for 2014 were:
Vodafone Group plc lost $28.16, based on dividend and mean target price estimates from three analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 22% less than the market as a whole.
CA Technologies (CA) lost $41.93 based on dividends and the mean of annual price estimates from nine analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 38% greater than the market as a whole.
Garmin Ltd. lost $58.89, based on dividends and a mean target price estimate by ten analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.
Staples, Inc. (SPLS) lost $62.74 based on dividend and a mean target price estimate from sixteen analysts including broker fees. The Beta number showed this estimate subject to volatility 51% more than the market as a whole.
Paychex, Inc. lost $67.08 based on dividend and a mean target price estimate from fifteen analysts including broker fees. The Beta number showed this estimate subject to volatility 7% less than the market as a whole.
The average net loss in dividend and price was over 5% on $5k invested as $1k in each of these five dogs. This loss estimate was subject to average volatility 7% more than the market as a whole.
The net gain and loss 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.
Stocks listed above were suggested only as possible 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.