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The December 10, 2012, edition of Barron's business weekly featured Our Ten Favorite Stocks for 2013 by Andrew Bary, nine of which pay dividends. The favorites were selected based on estimated ability to "produce 15% to 20% total returns (including dividends) next year."

In the same issue Shirley A. Lazo in Speaking of Dividends, listed 19 stocks. Those 9 "favorites" paying dividends plus 19 "quality stocks" made up the following list of Barron's 2013 Faves reported in SA last December in the article Can Barron's 2013 Faves Pass These Dog Tests?

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Beyond the usual dividend vs. price comparisons, the list of top ten Barron's Faves was also subjected to comparative net gains as of November 2012 and those projected to November 2013. The net gains calculations were based on analyst declared one year mean target pricing as projected by Yahoo Finance. Five top net gainers on the list were selected that way.

Actionable Conclusion (1): Barron's 2013 Faves Failed Their Dog Tests

Top ten dogs for the Barron's Faves were graphed below to show relative strengths by dividend and price as of December 7, 2012, and those projected to December 7, 2013.

Historic prices and actual dividends paid from $1,000 invested in the ten highest yielding stocks and the aggregate single share prices of those ten stocks created the data points for 2012. Projections based on estimated increases in dividend amounts from $1,000 invested in the ten highest yielding stocks and aggregate one year target share prices from Yahoo Finance created the 2013 data points - green for price and blue for dividends.

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One year mean target price data from Yahoo showed dividends from $1k invested in each of the top ten Barron's 2013 Faves in November 12 to decrease 6.7% while their aggregate single share price climbed 7.9% for 2013.

The book has closed for November 2013. Did Yahoo Finance projections hold? Last year's charts for this collection of dogs showed the investor could net 9.8% on $10k invested. This analysis included broker fees and predicted a shortfall from the "15% to 20% total returns" predicted by Barron's.

Actionable Conclusion (2): Average 2013 Upside Results Exceeded Analyst Targets

This is the 2013 update on how well or whether any of these dog projections held:

South Jersey Industries, Inc. (SJI) projected 20.93% upside in 2012. Actual upside was 12.63% as of November 2013.

Darden Restaurants, Inc. (DRI) projected 14.34% upside in 2012. Actual upside was 12.47% as of November 2013.

Bank of Nova Scotia (BNS) projected 13.50% upside in 2012. Actual upside was 7.10% as of November 2013.

McDonald's Corp. (MCD) projected 9.78% upside in 2012. Actual upside was 9.40% as of November 2013. The closest match of projected vs. actual of the five.

Lorillard, Inc. (LO) projected 7.34% upside in 2012. Actual upside was 31.88% as of November 2013 - he biggest gainer of the five.

Average upside was projected at 13.18% in 2012. The actual November 2013 upside average was 14.70% thanks to the 2012 projection of 7.34% being smoked by the actual upside of 31.88% fired up by Lorillard.

Actionable Conclusion (3): Real 2013 Net Gain Average Surpassed Analyst Target

Five projected net gains for 2013 vs. actual revealed by Yahoo were:

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South Jersey Industries, Inc. projected $224.74 (22.5%) vs. actual net gain of $141.76 (14.18%) made as of Nov. 2013 based on dividends plus mean target pricing set by 3 analysts less $20 in broker fees. Actual net was 8.32% short of projection.

Darden Restaurants, Inc. projected $166.24 (16.6%) vs. actual net gain of $147.60 (14.76%) made as of Nov. 2013 based on dividends plus mean target pricing set by 23 analysts less an estimated $20 in broker fees. Actual net was 1.84% short of projection.

Bank of Nova Scotia projected $156.42 (15.6%) vs. actual net gain of $92.38 (9.24%) made as of Nov. 2013 based on dividends plus mean target pricing set by 4 analysts less an estimated $20 in broker fees. Actual net was 6.36% short of projection.

McDonald's Corp. projected $112.57 (11.6%) vs. actual net gain of $108.84 (10.88%) made as of Nov. 2013 based on dividends plus mean target pricing set by 4 analysts less $20 in broker fees. Actual net was just 0.72% short of projection.

Lorillard, Inc. projected $104.46 (10.4%) vs. actual net gain of $352.45 (35.25%) made as of Nov. 2013 based on dividends plus mean target pricing set by 10 analysts less $20 in broker fees. Actual net was 24.85% beyond projection thanks in large part to a 3:1 stock split in January 2013.

Average net for these five stocks was projected at 15.3% in 2012. The actual November 2013 net gain average was 16.9% which exceeded analyst expectations for the five by 1.6%.

And What About 2014?

The December 9, 2013 Edition of Barron's business weekly featured Our Ten Favorite Stocks for 2014 by Andrew Bary. All ten favorites, he wrote, "can produce 15% total returns in 2014."

Other articles in the same issue, included Alexandra Scaggs in Speaking of Dividends, and Sizing Up Small Caps listed more stocks. The "favorites" paying dividends plus additional "quality stocks" made up the following list of 25 Barron's 2014 Faves:

The list of top twenty-five Barron's Faves was subjected to comparative net gains projected to November 2014 beyond the usual dividend vs price comparisons. The net gains calculations were based on analyst declared one year mean target pricing as projected by Yahoo Finance. Ten top net gainers on the list were selected that way.

Actionable Conclusion (4): Barron's 2014 Faves Also Failed Analyst Dog Tests

Top ten dogs for the Barron's Faves were graphed below to show relative strengths by dividend and price as of November 28, 2013, and those projected to November 28, 2014.

Historic prices and actual dividends paid from $1,000 invested in the ten highest yielding stocks and the aggregate single share prices of those ten stocks created the data points for 2012. Projections based on estimated increases in dividend amounts from $1,000 invested in the ten highest yielding stocks and aggregate one year target share prices from Yahoo Finance created the 2013 data points green for price and blue for dividends.

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One year mean target price data from Yahoo showed dividends from $10k invested as $1k in each of the top ten Barron's 2014 Faves in November 12 to decrease 8% while their aggregate single share price climbed 10% for 2014.

The book has not closed for November 2014. Will Yahoo Finance projections hold? Charts for this collection of dogs showed the investor could net 10.2% on $10k invested. This analysis included broker fees and predicted a shortfall of 4.8% from the "15% total returns" expected by Barron's.

Actionable Conclusion (5): Barron's 2014 Faves Analyst Targets Auger 9% to 29% Upsides

Yahoo Finance data for Barron's 2014 Fave stocks as of market closing prices November 28 was compared with analyst mean target price results one year hence. The comparison found four faves producing 20% to 29% price upsides.

Simon Property Group (SPG) from the financials sector with 20.14% upside placed lowest of the four. Just ahead, Hillenbrand, Inc. (HI) showing 20.9% upside is representative of the industrial goods sector. Canadian Natural Resources (CNQ) from the basic materials sector exhibiting a 20.9% price upside was second. At the top, Barrick Gold (ABX) also is a basic materials firm, boasted a 29.36% upside to lead the Barron's 2014 Faves. Six more dogs at the back of the pack showed 9.22% to 17.36% price upsides.

Average upside for ten Barron's high yield faves was projected by analysts at 16.78%.

Actionable Conclusion (6): Analysts Forecast 2014 Barron's Fave Dogs to Net 10% to 32%

Five of the ten top dividend yielding Barron's Favorite 2014 dogs were verified as being among the ten gainers for the coming year based on analyst 1 year target prices. So this year the dog strategy for this group as graded by Wall St. wizards was 50% accurate.

Ten probable profit generating trades were revealed by Thompson/First Call in Yahoo Finance for 2014:

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Barrick Gold netted $286.55, based on dividends plus mean target price estimate from twenty-two analysts less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole.

Hillenbrand, Inc. netted $216.85 based on dividends plus a mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 3% more than the market as a whole.

Canadian Natural Resources netted $215.77 based on estimates from thirteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 68% more than the market as a whole.

Simon Property Group netted $213.22 based on estimates from twenty-three analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.

Eastman Chemical (EMN) netted $172.44 based on estimates from fifteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 86% greater than the market as a whole.

Bank of Montreal (BMO) netted $158.45 based on estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 24% less than the market as a whole.

Time Warner (TWX) netted $131.42 based on estimates from twenty-nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 44% more than the market as a whole.

MetLife (MET) netted $122.41 based on estimates from eighteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 128% greater than the market as a whole.

Coca-Cola Co. (KO) netted $117.33, based on dividend plus mean target price estimates from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 74% less than the market as a whole.

Brookline Bancorp (BRKL) netted $110.00 based on dividends plus a mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.

The average net gain in dividend and price less broker fees was 17.4% on $10k invested as $1k in each of these ten Barron's 2014 Favorites dogs. This gain estimate from an average of 15 analysts was subject to average volatility 14% greater than the market as a whole.

The ability of Analyst 1 year mean target price projections to forecast performance is not fool proof. November 2012 forecasts for the 5 Barron's 2013 Favorites were roughly 90% accurate. The final examination for the ten 2014 favorites will be taken in November 2014. Stay tuned.

The 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.

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.

Source: Did Barron's 2013 Faves Pass Their Dog Tests? And What About 2014?