Results from Yahoo Finance tallied for NASDAQ US Dividend Achievers Select Index (DVG) members listed as of market closing prices October 18 were compared to analyst mean target price projections one year hence. The resulting chart of that data shown below turned up five stocks exhibiting 10% to 15% price upsides. UGI Corporation (NYSE:UGI), the Pennsylvania headquartered diversified utility with 9.92% showed near 10% upside of those five. PepsiCo Inc. (NYSE:PEP), the Purchase, NY based purveyor of snack and soda consumer goods fizzed 10.31% upside. Chevron Corp (NYSE:CVX), an integrated oil & gas basic materials company from San Ramon, CA flowed 10.31%. South Jersey Industries (NYSE:SJI), the Folsom, NJ based gas utility exhibited a 12.34% price upside. Coca Cola Co. (NYSE:KO), the Atlanta based purveyor of snack and soda consumer goods popped a near 15% upside to lead those five. Five other Achievers posted near 8% to 9% price upsides.
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 Dividend Achievers DVG 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.
The dividend achiever index lists stocks pedigreed as paying increasing dividends for ten or more years with selections determined in March of each year. The previously published list of 50 achievers was lost when the Mergent dividend achievers index marketing and promotion was turned over to NASDAQ for 2013. Hence this new list composed of 143 constituents of the NASDAQ US Dividend Achiever Select index (DVG) with at least five years of increasing annual dividends is about to undergo more methodology changes.
Results for one of fourteen in a series of index-specific articles devoted to dividend yield and price upsides were reported below. Prompted by Seeking Alpha reader requests, this series has supplied results for the following 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.
The 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 Dividend Achievers DVG Index top dog selections for October were disclosed step by step.
Dog Metrics Sorted Dividend Achievers DVG Index Stocks by Yield
The NASDAQ US Dividend Achievers Select Index (DVG) was chosen from here. NASDAQ the publisher, said: "The NASDAQ US Dividend Achievers Select Index is comprised of a select group of securities with at least ten consecutive years of increasing annual regular dividend payments."
Dividend Achievers DVG top ten stocks paying the biggest dividends as of October included equities representing six of nine market sectors. The top stock as revealed by Yahoo Finance data, Maxim Integrated (NASDAQ:MXIM) was the lone technology firm. A services firm, McDonald's Corp (NYSE:MCD), placed second. Two basic materials firm; Chevron Corp. and Exxon Mobil placed third and tenth. The best yielding financial stock, Erie Indemnity Co. (NASDAQ:ERIE), placed fourth, another financial firm, First Financial Corp [IN] (NASDAQ:THFF), took seventh place on this list. Two consumer goods representatives, Procter & Gamble Co (NYSE:PG), and Coca Cola placed sixth and ninth. Three utility firms in fifth, seventh and eighth places, completed the top ten dividend achievers: Connecticut Water Svcs Inc. (NASDAQ:CTWS); South Jersey Industries; MGE Energy Inc. (NASDAQ:MGEE).
Dividend Vs. Price Results Compared to Dow Dogs
Below is a graph of the relative strengths of the top ten Dividend Achievers dogs by yield as of market close 10/18/2013 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): October's Bullish Dividend Achievers & Dithering Dow Dogs
NASDAQ DVG Dividend Achievers showed another bullish signal since September. Achievers top ten dog dividend from $10k ($1k invested in each stock) dropped 0.21% as aggregate single price of those stocks hopped up 2%. The achiever dogs exhibited an overbought condition in which aggregate single share price of the ten exceeded projected annual dividend from $10k invested as $1k in each of the ten by over $344 or 110% in September and increased to $358 or 115% in October.
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 sniff out bargains.
Actionable Conclusion Too (2): Wall St. Wizards Wangle Near 7% Net Gain from Top 20 Dividend Achiever DVG Dogs In October 2014
Twenty dogs from the Dividend Achievers DVG index were graphed below to show relative strengths by dividend and price as of October 18, 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 $10,000 invested $1k in each of 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 4.5% lower dividend from $10K invested in this group while aggregate single share price was projected to increase 5.6% 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 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 (3): Analysts Forecast Ten Dividend Achievers to Net 8% to 15.5% By October 2014
Seven of the ten top dividend yielding Dividend Achievers DVG 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 70% accurate.
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
Coca Cola Co. The netted $155.35 is based on dividends plus the mean of annual price estimates from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 74% less than the market as a whole.
South Jersey Industries netted $133.09, based on dividend plus mean target price estimates from three analysts less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.
Chevron Corp netted $118.91 based on dividends plus mean target price estimate from twenty analysts less broker fees. The Beta number showed this estimate subject to volatility 16% more than the market as a whole.
PepsiCo Inc. netted $110.47 based on dividends plus the mean of annual price estimates from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 72% less than the market as a whole.
U G I Corporation netted $107.64 based on dividends plus mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 23% less than the market as a whole.
McDonald's Corp. netted $105.42 based on a mean target price estimate from twenty-one analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 1% less than the market as a whole.
Connecticut Water Services Inc. netted $99.26 based on a mean target price estimate from three analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 62% less than the market as a whole.
Procter & Gamble Co. netted $90.31, based on dividends plus a mean target price estimate by seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole.
Exxon Mobil Corporation (NYSE:XOM) netted $90.22 based on estimates from eighteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.
OneOK Inc (NYSE:OKE) netted $84.80 based on dividends plus mean target price estimate from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 14% more than the market as a whole.
The average net gain in dividend and price was nearly 11% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 31% less than the market as a whole.
The stocks listed above were suggested only as decent starting points for your Achiever 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.