This regular monthly report tallied results from Yahoo Finance for monthly paying (mopay) dividend stocks as of market closing prices November 18 compared with analyst mean target price results one year hence. Three stocks boasted 20% to 34.67% price upsides. Pacific Coast Oil Trust (NYSE:ROYT) an Austin, TX headquartered independent oil & gas firm at 20.0% showed the lesser upside of those three. In the middle, Atlantic Power Corp (NYSE:AT) that falling knife, infamous electric utility, loved by bears and analysts but despised by stockholders, showed 31.44% upside. In the end, Enduro Royalty Trust (NYSE:NDRO) another Austin based independent oil and gas firm exhibited a 34.67% price upside to lead the November mopay dogs. Seven more members of the mopay pack showed near 12% to 19% price upsides.
The chart above used the one year mean target price set by brokerage analysts matched against November 17 closing price to compare ten mopay 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.
Monthly pay dividend dog stock lists reviewed since June 2012 prompted reader suggestions to include funds, trusts, and partnerships. A list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. Thereafter a docile, sleeping dogs list was supplemented by an upside potential article in October and a upside vs. buy & hold in November. Another list factored December reader comments. January, February, March, April, May, June, July, August, September and October 2013 reader input all contributed to this article which compared and contrasted November MoPay stock upside potential against high yield (and higher risk) buy and hold fund, trust and partnership constituents. Six actionable conclusions were drawn.
Monthly Pay Dividend Pros and Cons
Quarterly, Semi-Annual and Annual dividend stockholders anxiously await announcements from a firm, fund, or analyst to learn if their next dividend will be higher, lower, or paid at all. Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses. This advantage has been countered when companies suddenly cut monthly dividends to save cash and trigger a price crash. So the segment is volatile.
January reader TennisBoy88 wrote: "One other advantage of monthly paying stocks is the way they are slightly protected against traders that buy just before the ex-date and sell after the record date. The brokerage commissions they have to pay for a measly monthly dividend helps keep them away and the stock price doesn't fluctuate so wildly."
Many readers are offended by the term "dividend" applied to REITs, MLPs and hybrid financial institutions. For example, arbtrdr wrote: "The only problem with this analysis is you are comparing companies of VERY different varieties. REITs pay no taxes and their distributions are classified as ordinary income and thus not subject to the 15% or 20% tax rate. MLPs also pay little no taxes at the corporate level, but instead have "distributions"... Comparing REITs, MLPs and regular corporations thus requires a financial analysis...not include[d].
An August comment from drking reflected another advantage of receiving 12 vs. 4 dividends per year: "Mopay dividends reinvested will return almost 1% more yearly than quarterly payors as it compounds faster."
Dogs of the Index Metrics Extracted Bargains
For this article fifty three dividend equities plus sixty funds, partnerships, and trusts were culled from over 650 entities listed here paying monthly returns. These were ranked as of November 18, 2013 using the two key dog performance metrics: (1) stock price; (2) annual dividend. Dividing the annual dividend by the price declared the percentage yield by which each dividend dog stock was ranked.
November Monthly Pay Dividend Stocks
Ten monthly pay dividend equities showing the best yields for November represented just three of the nine Yahoo market sectors. Top two dog stocks revealed by Yahoo Finance data were Javelin Mortgage Investment Corp. (NYSE:JMI), and Armour Residential REIT (NYSE:ARR). These were two of seven financial sector firms that dominated the list. The remaining five financial mopay dogs placed fourth, fifth, seventh, eighth, and tenth: Five Oaks Investment Corp. (NYSE:OAKS); Orchid Island Capital Inc (NYSE:ORC); Full Circle Capital Corp. (NASDAQ:FULL); Prospect Capital Corporation (NASDAQ:PSEC); Fifth Street Finance (NASDAQ:FSC).
The third slot in the top ten was filled by one of two basic materials concerns, Enduro Royalty Trust , the other basic material firm, Pacific Coast Oil Trust placed sixth. The lone utility on the list, Just Energy Group Inc. (NYSE:JE). rounded out the mopay top dog list in ninth place.
MoPay Dividend vs. Price Compared to Dow Dogs
Relative strength for the top ten MoPay dividend dog stocks by yield was graphed below as of November 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 dividends.
Actionable Conclusion (1): MoPay Dogs Muddled As Dow Dogs Chased Bulls
MoPay dividend dogs muddled after October. Aggregate dividend from $10k invested as $1k in each of the top ten stocks rose at a rate of 3.6% since then while total single share price of those ten also rose at a 5.5% rate for that period.
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 dig out bargains.
Actionable Conclusion Two (2): Wall St. Wizard Wisdom Wished 23.9% 1 yr. Net Gain from Top 10 MoPay Dogs
Top dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of November 18, 2013 and those projected by analyst mean price target estimates to the same date in 2014.
Historic prices and actual dividends paid from $10,000 invested as $1K in each of the ten highest yielding stocks and the aggregate single share prices of those ten stocks created the data points for 2013. Projections based on estimated increases in dividend amounts from $1000 invested in the ten highest yielding stocks and aggregate one year analyst mean target prices as reported by Yahoo Finance created the 2014 data points in blue for dividend and green for price. Note: one year target estimated prices from one analyst were not included (n/a).
Yahoo projected a nearly 11% lower dividend from $10K invested as $1k in the top ten mopay dogs while aggregate single share price was projected to increase by nearly 14% 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 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 stock price movement opposite of market direction.
Actionable Conclusion (3): Analysts Forecast 2014 NEXT10 MoPay DiviDog November Net Gains of 16%
Ten monthly dividend equities that showed the next best yields November 18 represented three of the nine Yahoo market sectors. The eleventh dog stock revealed by Yahoo Finance data was Hugoton Royalty Trust (NYSE:HGT) the best of five basic materials sector stocks that dominated this list. Four remaining basic materials firms placed fourteenth, sixteenth, seventeenth, and twentieth: Cross Timbers Royalty Trust (NYSE:CRT); Linn Energy, LLC (LINE); LinnCo LLC (NASDAQ:LNCO); Vanguard Natural Resources (NASDAQ:VNR). In twelfth place, Atlantic Power Corporation was the lone utility. In slot thirteen, Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR) was the best of four financial firms. Other financials were Horizon Technology Finance Corp. (NASDAQ:HRZN) in fifteenth place; Harvest Capital Credit Corporation (NASDAQ:HCAP) in eighteenth; Gladstone Land Corporation (NASDAQ:LAND) placed nineteenth and completed the NEXT ten November mopay dividog list.
The NEXT ten dogs showed a 9% lower dividend from $10k invested as 1k in each stock while aggregate single share price for the next ten was projected by analysts to increase by over 10.5% in the coming year.
The number of analysts contributing to the mean target price estimate for each stock is noted in the next to the last column on the above 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 that 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 price movement opposite of market direction.
Actionable Conclusion (4): Analysts Project Ten MoPay Dogs to Net 20% to 50% Gains by November, 2014
Six of the ten top dividend yielding mopay dogs were verified as being among the Top ten gainers for the coming year based on analyst 1 year target prices. So as of October 31 the dog strategy for this mopay group as graded by Wall St. wizards was 50% accurate.
Ten probable profit generating trades revealed by Yahoo Finance for 2014 were:
Enduro Royalty Trust netted $506.79 based on dividends plus mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 2% less than the market as a whole.
Atlantic Power Corp netted $398.43 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 65% less than the market as a whole.
Pacific Coast Oil Trust netted $327.71 based on dividends plus a mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.
Armour Residential REIT netted $319.95 based on estimates from nine analysts plus dividends less broker fees. A Beta number was not available for ARR.
Orchid Island Capital Inc netted $280.81 based on estimates from two analysts plus dividends less broker fees. A Beta number was not available for ORC.
Five Oaks Investment Corp netted $235.81 based on a mean target price estimate from two analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 118% opposite the market as a whole.
Linn Energy, LLC netted $216.68 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 25% less than the market as a whole.
Fifth Street Finance Corporation netted $214.25, based on dividend plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.
Gladstone Land Corporation netted $202.98, based on dividend plus mean target price estimates from four analysts less broker fees. The Beta number showed this estimate subject to volatility 118% opposite the market as a whole.
Horizon Technology Finance Corporation netted $197.20 based on dividends plus the mean of annual price estimates from five analysts less broker fees. The Beta number showed this estimate subject to volatility 58% less than the market as a whole.
The average net gain in dividend and price was 29% on $1k invested in each of these ten mopay dogs. This gain estimate was subject to average volatility 23% 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 mopay dividend stock purchase research process. These were not recommendations.
November Monthly Pay Dividend Funds and Trusts
The sixty top monthly dividend paying (MoPay) funds and trusts listed above were culled from over 600 candidates then ranked by yields calculated as of November 18 to determine the Top Ten.
Ten monthly dividend funds, trusts and partnerships showing the biggest yields for November featured six closed-end funds, two exchange traded notes, one trust and one exchange traded fund. Top two closed-end funds as revealed by Yahoo Finance data were Cornerstone Progressive Return Fund (NYSEMKT:CFP) which returned to the list as of July 8 after it suspended its rights offering June 24, and Cornerstone Total Return Fund, Inc (NYSEMKT:CRF). Two ETNs placed third and seventh: Credit Suisse Silver Shares (NASDAQ:SLVO); Credit Suisse Gold Shrs (NASDAQ:GLDI). The lone trust, Invesco Municipal Premium Income Trust (NYSE:PIA) placed eighth. The balance of the closed-end funds placed fourth through sixth and ninth: Gabelli Global Gold Natural Resources & Income Trust (NYSEMKT:GGN); Cornerstone Total Return Fund, Inc.; Pimco High Income Fund Com Shs (NYSE:PHK); Western Asset High Income Fund II Inc (NYSE:HIX). A lone ETF, Exchange Traded Concepts Trust (NYSEARCA:YYY) in tenth completed the list.
Fund & Trust Dividend & Price Results vs. MoPay Top Ten Stocks
Below relative strengths for the top ten MoPay Dividend F&T Dogs by yield was graphed as of November 17, 2013 and compared to those of the top ten stocks. Twelve periods of projected annual dividend history from $10,000 invested as $1k in each of the ten highest yielding equities and the total single share prices of those ten equities created the data points for each period shown in blue for dividend and green for price.
Actionable Conclusion (5): MoPay Top Ten DiviDog Funds & Trusts Bullish; as Stocks Dithered
Charts showed MoPay dividend dog funds and trusts decreased in dividend while price rose since October. Projected dividend from 10k invested as $1k in each of the top ten funds and trusts declined 0.88% while aggregate single share price of the top ten over the same period inclined 1.1%.
A gap between aggregate single share price of top ten mopay funds and trusts and their projected dividend from $1k invested in those ten equities increased from 854% in June to 1114% in September 2013, rocketed to 1173% in October, then fell to 1148% in November.
MoPay dividend stock dogs muddled after October. Aggregate dividend from $10k invested as $1k in each of the top ten stocks surged up at a rate of 4% since then while total single share price of those ten inclined 5% for that period.
The gap between aggregate single share price and dividend from $1k invested in each for the ten mopay stocks remained near 1200%. In July that gap was 790%. In August it expanded to 970%. In September the gap narrowed to 864%. In October the gap was 1205%. In November the gap became 1184%
As of November 18 the top MoPay fund and trust dogs showed $185 or 14% more dividend at a $4 or 4% higher aggregate single share price than the MoPay stocks top ten.
Actionable Conclusion (6): Buy and Hold Monthly Dividend Paying Funds & Trusts, If You Dare
Stock analysts don't hazard guesses as to when or how much fund and trust prices will rise or fall. They are paid to gauge individual stocks, and a few funds and partnerships. Hence this monthly pay F&T dog diligence only revealed a list of funds and trusts to buy and hold if you dare.
However, the risk for an investment in mopay dividend funds and trusts has dropped since the first of the year when it was 30% greater than stocks. Meanwhile the risk for an investment in mopay stocks has increased to the point where funds and trusts are now only 15% more risky.
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.
Disclosure: I am long ARR, AT, ERF, FSC, HRZN, PGH, GE, INTC, MCD, MSFT, PFE, T, VZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.