Yield (dividend / price) results from here verified by Yahoo Finance for monthly dividend paying small, mid, & large cap (MoPaySML) stocks as of market closing prices as of March 5 compared with analyst 1-yr target projections led to four actionable conclusions discussed below.
Wall Street Wizard Weights
One-year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment were used to compare ten stocks showing the highest upside price potential into 2015 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 was considered optimal for a valid mean target price estimate.
Actionable Conclusion (1) Ten MoPaySML Dividend Dogs Chased 8% to 34% Upsides
Dog Metrics Extracted Bargains
Thirty small, mid, and large cap monthly return equities were culled from over 650 entities for this article.
Ten monthly pay SML Cap dividend equities showing top yields, represented the usual three of nine Yahoo market sectors: financials, utilities, & basic materials. Four financial sector firms were led by top dog Armour Residential REIT (NYSE:ARR). Prospect Capital Corporation (NASDAQ:PSEC) in third, and Fifth Street Finance (NYSE:FSC) in sixth place, were followed by relative newcomer small cap Stellus Capital Investment Corporation (NYSE:SCM) in ninth place.
Four basic materials concerns placed fourth, fifth, eighth, and tenth: Pacific Coast Oil Trust (NYSE:ROYT); QR Energy LP (NYSE:QRE); LinnCo LLC (LNCO); Enduro Royalty Trust (NYSE:NDRO) to complete the March 5 MoPaySML top dog list.
Actionable Conclusion (2): MoPaySML Were Mixed Up as Dow Dogs Retreated
MoPaySML rose up in both price and dividend since February 20 to March 5. Total single share price of the top ten increased over 3% for that 2-week period. Aggregate dividend from $10k invested as $1k in each of the top ten dogs rose at a rate of 1.4% since then to confirm the mixed up signal.
The Dow dogs, meanwhile, turned mildly bearish as projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs rose 0.3% since February 20, while aggregate single share price fell 0.12%. The Dow dogs overbought condition in which aggregate single share price of the ten exceeded projected annual dividend from $10k invested in those ten (@$1k each) shrank 1%. The overhang of $129 or 34% February 20 narrowed to $128 or 33% March 5. A little of the recent move was attributable to Microsoft (NASDAQ:MSFT) replacing Coca-Cola Co. (NYSE:KO) at the tail of the top ten Dow dogs since February.
Actionable Conclusion (3): Wall Street Wizards Wished Over 18% 1 yr. Net Gain from Top 20 MoPaySML Dogs By March 5, 2015
Top 20 dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of March 5, 2014 and those projected by analyst mean price target estimates to the same date in 2015.
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 2015.
Historic prices and actual dividends paid from $1000 invested in each of 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 over 10% lower dividend from $10K invested as $1k in the average ten of this group of while aggregate single share price of those ten was projected to increase by over 11% 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 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 (4): Wall St. Analysts Forecast MoPaySML DiviDog Net Gains of 17% to 41% by March 5, 2015
Seven of the ten top dividend yielding MoPaySML dogs were verified as being among the ten gainers out of 20 for the coming year based on analyst 1-year target prices. So this week the dog strategy for this collection as graded by Wall St. wizards was again 70% accurate.
Ten probable profit generating trades were revealed by Thompson/First Call in Yahoo Finance into 2015:
Enduro Royalty Trust netted $413,28 based on dividends plus mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 69% less than the market as a whole.
Pacific Coast Oil Trust netted $353.68 based on dividends plus a mean target price estimate from three analysts less broker fees. A Beta number was also not available for ROYT.
Atlantic Power Corp netted $329.44 based on estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole. This upside was recently tapered by analysts as their mean target price estimate decreased.
Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) netted $300.67 based on a mean target price estimate from eight analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 23% less than the market as a whole.
Banco Bradesco S.A (NYSE:BBD) netted $279.91 based on a mean target price estimate from seven analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 66% greater than the market as a whole.
Pengrowth Energy Corp (NYSE:PGH) netted $268.43, based on dividend plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 62% greater than the market as a whole.
Linn Co., LLC netted $252.49, based on dividend plus mean target price estimates from nine analysts less broker fees. A Beta number was also not available for LNCO.
Stellus Capital Investment netted $202.64 based on a mean target price estimate from four analysts combined with projected annual dividend less broker fees. A Beta number was also not available for SCM.
Prospect Capital Corp netted $188.49 based on estimates from eleven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 16% less than the market as a whole.
QR Energy LP netted $168.91 based on dividends plus the mean of annual price estimates from ten analysts less broker fees. A Beta number was also not available for QRE.
The average net gain in dividend and price was 27.6% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to average volatility 7% less than the market as a whole.
The stocks listed above were suggested only as decent starting points for a MoPay dog dividend stock purchase research process in March, 2014. These were not recommendations.
Gains as reported do not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences 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.
Disclosure: I am long ARR, AT, PGH, FSC, CSCO, CVX, 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.