Results for S&P 500 Index members from Yahoo Finance tallied as of market closing prices November 15 were compared with analyst mean target gain results one year hence. The resulting chart of that data below showcased four stocks sporting 13% to near 20% price upsides. CenturyLink (NYSE:CTL) in telecom service technology from Monroe, LA at 13.05% showed the lowest upside of those four. PG&E Corporation (NYSE:PCG) a San Francisco based electric utility showed the second lowest 13.68% upside. Ventas Inc. (NYSE:FE) a Chicago based healthcare REIT in the financial sector exhibited a nearly top 15.92% price upside. Kinder Morgan, Inc. (NYSE:KMI) the Houston based oil & gas pipeline basic materials firm exhibited a 19.83% price upside to lead the S&P 500 index in 1 yr target price upside. Six other members of the S&P500 index back in the pack showed 6.18% to 11.1% price upsides.
The chart above used the one year mean target price set by brokerage analysts matched against November 15 closing price to compare ten S&P 500 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.
This article reports the S&P 500 Index as of the above date by projecting gain results one year hence. Seeking Alpha reader requests prompted this series of index-specific articles reporting dividend yield plus price upside results for several stock indices: Dow 30; Russell 2000; S&P 500; S&P Aristocrats; Russell 1000; NASDAQ 100; Champions; Contenders; Challengers; Carnevale's Power 25 & Super 29 lists combined as his Solid 40.
This 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 S&P 500 Index top dog selections for November were disclosed step by step.
Dog Metrics Sorted S&P 500 Stocks by Yield
McGraw Hill Finance, publisher of the Dow Jones S&P 500 Index states:
"The S&P 500® is widely regarded as the best single gauge of large cap U.S. equities. There is over USD 5.58 trillion benchmarked to the index, with index assets comprising approximately USD 1.3 trillion of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization."
Five of nine sectors placed top dogs in this index for November. Top dog Windstream Corp (NASDAQ:WIN) was one of four technology firms in the top ten. The other technology firms were Frontier Communications (NASDAQ:FTR), second; CenturyLink Inc. , third; AT&T, Inc. (NYSE:T), eighth. Three Utilities filled the four, five, and seven slots: First Energy Corp. ; Pepco Holdings, Inc. (NYSE:POM); Entergy Corporation (NYSE:ETR). HCP, Inc (NYSE:HCP) in sixth place was the lone health care firm. A single financial firm was represented in ninth place by Health Care REIT (NYSE:HCN). The lone consumer goods dog, Altria Group, Inc (NYSE:MO) in tenth place completed the S&P 500 top ten dogs.
Dividend vs. Price Results Compared to Dow Dogs
Relative strengths of the top ten S&P 500 dogs by yield as of market close 11/15/2013 compared to those of the Dow are shown in the graphs and charts below. Projected annual dividend history from $10.000 invested as $1k 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): S&P 500 Dogs Barely Bullish as Dow Dogs Chased Bulls
The November S&P 500 collection of dividend payers showed mixed results as price continued an upward course rising nearly 10% after October. Aggregate dividend from $1k invested in each ($10k total) for the top ten S&P 500 stocks, however, also increased at a 0.3% rate in that period to dampen the bullish course.
For the Dow dogs, meanwhile, projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs dropped over 1.1% since October, while aggregate single share price jumped up nearly 5.3%. 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 grew some. The overhang was $125 or 33% in August, and expanded to $161 or 43% for September, shrank down to $111 or 30% for October, and expanded again to $140 or 38'% as of November 14. Most of this bull rally was triggered by JPMorgan Chase & Co. (NYSE:JPM) replacing Microsoft (NASDAQ:MSFT) in the top ten Dow dogs this past month.
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 Wand An 10.4% Net Gain from Top 20 S&P 500 Dogs In 2014
Top twenty dogs from the S&P 500 index were graphed below to show relative strengths by dividend and price as of November 15, 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 $1000 invested in 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 6% lower dividend from $10K invested in this group while aggregate single share price was projected to increase over 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 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 opposed to market direction.
Actionable Conclusion (3): Analysts Tap Ten S&P 500 Dogs to Net 8.9% to 22.5% By November, 2014
Five of the top yielding dividend S&P 500 dogs were verified as top gainers for the coming year by analyst 1 year target prices. So this month the dog strategy as graded by wall street wizards is 50% accurate.
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
Kinder Morgan Energy Partners, L.P. netted $224.70 based on a mean target price estimate from fourteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 39% less than the market as a whole.
Windstream Corporation netted $209.09, based on dividends plus a mean target price estimate by fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 7% less than the market as a whole.
Ventas, Inc. (NYSE:VTR) netted $183.01 based on estimates from twelve analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.
CenturyLink netted $177.82 based on dividends plus the mean of annual price estimates from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 43% less than the market as a whole.
PG&E Corporation netted $161.00 based on dividends plus mean target price estimate from eighteen analysts less broker fees. The Beta number showed this estimate subject to volatility 64% less than the market as a whole.
HCP, Inc netted $143.78 based on estimates from thirteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.
First Energy Corporation netted $126.60 based on dividends plus mean target price estimate from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 89% less than the market as a whole.
Health Care REIT netted $125.76 based on dividends plus mean target price estimate from fifteen analysts less broker fees. The Beta number showed this estimate subject to volatility 27% less than the market as a whole.
Integrys Energy Group (NYSE:TEG) netted $107.91 based on a mean target price estimate from five analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 48% less than the market as a whole.
PPL Corporation (NYSE:PPL) netted $89.40 based on estimates from eighteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 82% less than the market as a whole.
The average net gain in dividend and price was about 15.5% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 46% 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 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.