Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.
This end of month report tallied results from here as verified using Yahoo Finance data for consumer goods sector stocks as of market closing prices November 1 along with analyst mean target price results one year hence. The comparison showed 3 stocks boasting 7.06% to 16.35% price upsides. Greif Inc. (GEF), a Delaware, OH headquartered packaging and container firm, at 7.06% showed the lowest upside of those three. B&G Foods (BGS), the Parsippany, NJ based processed and packaged goods firm, at 7.58% showed the mid-best upside. (Perhaps they are buying their packaging from Greif.) Finally, ConAgra Foods, Inc. (CAG), an Omaha, NE based processed and packaged goods firm, exhibited a 16.35% price upside to lead the November 1 consumer goods sector dogs. Seven other firms back in the pack showed 3.46% to 6.28% upsides.
This report presumed yield (dividend / price) dividend dog methodology applied to any sector and compared that sector side by side with the Dow index.
Since the fall of 2011, this report series applied dog 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 (Tech), and utilities (Utes).
Below, the Arnold ConGo Selections for October 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 November 1 represented six industries. The top seven slots included five firms representing the cigarettes industry: Vector Group (VGR) was tops; followed by Altria (MO), third; Reynolds (RAI), fourth; Lorillard, Inc. (LO), sixth; Philip Morris International (PM), seventh. The only auto parts firm listed, Douglas Dynamics, Inc. (PLOW) was second dog. Representing paper and paper products, Orchids Paper Products Co. (TIS) was fifth. Completing the top ten ConGo dogs were: Home furnishings and fixtures firm, Leggett & Platt, Incorporated in eighth; the office supplies representative, Ennis, Inc. (EBF) placed ninth; finally, above mentioned processed & packaged goods firm, B&G Foods 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 11/1/2013 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 those data points shown in green for price and blue for dividends.
Actionable Conclusion 1: ConGo Dogs Stayed Bearish as Dow Dithered
Consumer goods dividend payers extended a bullish price course set since August. Total single share price dropped 7% since September. In the same period dividend from $10k invested as $1k in each of the top ten ConGo stocks increased at a rate of 0.7%
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 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 6.6% 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 November 1, 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 2.5% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by nearly 3% in the coming year. Note the overbought condition of the top twenty consumer goods sector dogs by yield as signaled by aggregate single share price of the ten exceeding projected annual dividend from $10k invested as $1k in each of the ten for 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 stocks movement opposite of market direction.
Actionable Conclusion 3: Analysts Forecast 10 ConGo DiviDog Stock Net Gains of 4.6% to 17.5% By October 2014
Six 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 60% accurate.
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
ConAgra Foods, Inc. netted $174.97, based on dividends plus a mean target price estimate by thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 51% less than the market as a whole.
B&G Foods netted $94.89, based on dividends plus mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 27% more than the market as a whole.
Douglas Dynamics, Inc. netted $91.98, based on estimates from four analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 6% more than the market as a whole.
Philip Morris International netted $83.94 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 11% less than the market as a whole.
Leggett & Platt (LEG) netted $82.71 based on estimates from three analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 7% less than the market as a whole.
Greif Inc. netted $82.04 based on dividends plus a mean target price estimate from seven analysts less broker fees. The Beta number showed this estimate subject to volatility 32% more than the market as a whole.
Kraft Foods Group, Inc. (KRFT) netted $81.23 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 21% less than the market as a whole.
Orchids Paper Products Co. netted $79.58 based on estimates from two analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 5% opposite the market as a whole.
Altria Group netted $66.53 based on estimates from eleven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole.
Mattel, Inc. (MAT) netted $46.73 based on estimates from eleven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 43% less than the market as a whole.
The average net gain in dividend and price less broker fees was over 8.8% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 29% 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.