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Summary

  • 7 top S&P 500 Aristocrat index dividend dogs showed upsides above 5% as of April 4 while three lagged (as ranked by analyst mean target price) with 3.72% to 4.93%.
  • A charging bull pursued both the S&P 500 Aristocrat dogs and the dogs of the Dow.
  • Analysts projected average 8.4% 1 yr. net gains for KO, CVX, PG, PEP, ED, NUE, MCD, GPC, SYY, & ABBV.
  • Consider these stocks as possible starting points for your S&P 500 Aristocrat index dividend dog stock purchase research.

S&P 500 Aristocrats Index results from Yahoo Finance tallied as of market closing prices April 4, 2014 compared with analyst mean target gain results one year out displayed three stocks posting 9.00% to 14.81% price upsides.

The chart of that data shown below showed Coca Cola Co. (NYSE:KO), Atlanta's beloved soft drink firm, with the high 14.81% upside lead the pack of S&P Aristocrats Index dogs. Trailing the seven in the lead were three single digit price upside dogs with 3.72% to 4.93%. AbbVie Inc. a Chicago major drug maker from the healthcare sector (NYSE:ABBV) showed the 3.72% upside at the tail of the dogs.

Arnold top Dow dog selections for March were disclosed below step by step. Four actionable conclusions were drawn.

Actionable Conclusion (1): 10 Aristocrat Dogs Chase 4% to 15% Upsides In March

The chart above used one year mean target price calculated from brokerage analysts compared to end-of-month closing price to determine sector 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 were considered optimal for a valid mean target price estimate.

Seeking Alpha reader requests prompted this series of index-specific articles reporting dividend yield plus price upside results for these indices: Dow 30; S&P 500; Russell 2000 & 1000; S&P Aristocrats; NASDAQ 100; Champions; Challengers; Global.

Thirty For the Money

The object of this posting was to reveal bargain stocks to buy and hold for at least one year. Stocks reported were termed dogs because they were all selected based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), which revealed how high yielding stocks whose prices increased (and whose dividend yields therefore decreased) could be sold off once a year to sweep gains and reinvest the seed money into higher yielding stocks in the same index, named Dogs of the Dow. O'Higgins system works to find bargains in any collection of dividend paying stocks. Utilizing analyst price upside estimates expanded the universe to include popular growth equities, if desired.

Dog Metrics Ranked S&P 500 Aristocrats Index Stocks by Yield

McGraw Hill, publisher if this index, states:

"The S&P 500® Dividend Aristocrats index measures the performance of large cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years."

Ten top March Aristocrats by yield included firms representing seven of nine business sectors. One of two financial firms, HCP, Inc. (NYSE:HCP), led the pack. The other financial, Cincinnati Financial (NASDAQ:CINF), placed fifth. A lone technology dog, AT&T (NYSE:T), placed second. The singular utility, Consolidated Edison Inc. (NYSE:ED) was third. Two consumer goods firms placed fourth, and tenth: Leggett & Platt (NYSE:LEG), and Clorox Co (NYSE:CLX). Basic Materials representative, Chevron Corp. (NYSE:CVX) placed sixth. Two service sector firms, McDonald's Corp (NYSE:MCD), and Sysco Corp (NYSE:SYY), placed seventh and eighth. A lone Healthcare firm, AbbVie Inc. was ninth and completed this top ten S&P 500 Aristocrats dog list.

Dividend vs. Price Results Compared to Dow Dogs

Periodic strengths of ten top Aristocrats dogs by yield were graphed below as of market closing prices through 4/4/2014 and compared to those of the Dow. Projected annual dividend history from $10,000 invested as $1k in each of the ten highest yielding stocks and the total single share price of those ten stocks created the data points shown in green for price and blue for dividend.

(click to enlarge)

Actionable Conclusion (2): S&P Aristo & Dow Dogs Charged Ahead

S&P Aristocrats top dividend payers put on a bullish charge after February. Total single share price increased 2% in that period. Aggregate dividend from $10k invested as $1k in each of the top ten S&P Aristocrats dropped 3%. The Aristocrats overbought condition grew as aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each. Their overhang was a record $244 or 64% in December, fell to $187 or 47% for January, nudged up to $189 remaining at 47% in February, then swelled to $213 or 55% in March.

Joy returned to the Dow dogs as projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs fell 2.7% since February. Aggregate single share price swelled 2.7% to confirm the bullish sign. The Dow dogs overbought condition grew as aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten. The overhang was $145 or 38% for January, then retreated to $125 or 33% in February, then swelled to $149 or 40% in March. Most of this recent joy on the Dow was triggered by across the board price improvement propelling dividends lower by yield.

To quantify top dog rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential. Added to the simple high yield "dog" metric, analyst mean price target estimates provided another tool to dig out bargains.

Actionable Conclusion (3): Wall St. Wizards Wish for 6% Net Gains from Top 20 Aristocrat Dogs By March 2015

op twenty dogs from the S&P 500 Aristocrats index were graphed below to show relative strengths by dividend and price as of April 4, 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 price upsides and net gains including dividends less broker fees as of 2015.

Historic prices and actual dividends paid from $20,000 invested as $1k in each of the highest yielding stocks and the aggregate single share prices of those twenty stocks divided by 2 created data points for 2014. 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 2015 data points green for price and blue for dividend.

(click to enlarge)

Yahoo projected a 3.4% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by over 4% in the coming year. Notice that price exceeded dividend signaling an analyst predicted overbought S&P Aristocrats index into 2015. 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 estimate.

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 numbers indicated the degree of a stocks movement opposed to market direction.

Actionable Conclusion (4): Analysts Await 10 S&P 500 Dividend Aristocrat Dogs Netting 4.9% to 16% By March 2015

Five of the top yielding dividend S&P 500 Aristocrat dogs were verified as being among the top ten gainers for the coming year by analyst 1 year target prices. So this month the dog strategy as graded by Wall St. wizards was 50% accurate.

Ten probable profit generating trades revealed by Yahoo Finance for 2015 were:

Coca-Cola Co netted $160.01 based on dividends plus a mean target price estimate from eighteen analysts less broker fees. The Beta number showed this estimate subject to volatility 65% less than the market as a whole.

Chevron Corp netted $106.35, based on dividend plus mean target price estimates from twenty analysts less broker fees. The Beta number showed this estimate subject to volatility 8% more than the market as a whole.

Procter & Gamble (NYSE:PG) netted $100.22 based on dividends plus a mean target price estimate from nineteen analysts less broker fees. The Beta number showed this estimate subject to volatility 60% less than the market as a whole.

PepsiCo Inc. (NYSE:PEP) netted $90.06 based on dividends plus a mean target price estimate from seventeen analysts less broker fees. The Beta number showed this estimate subject to volatility 64% less than the market as a whole.

Consolidated Edison Inc netted $75.66 based on dividends plus a mean target price estimate from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 1% opposite the market as a whole.

Nucor Corp (NYSE:NUE) netted $67.87 based on a mean target price estimate from eighteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 47% more than the market as a whole.

McDonald's Corp netted $65.73 based on dividends plus a mean target price estimate from twenty-one analysts less broker fees. The Beta number showed this estimate subject to volatility 65% less than the market as a whole.

Genuine Parts Co. (NYSE:GPC) netted $65.52 based on target price estimates from eight analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 34% less than the market as a whole.

Sysco Corp. netted $56.58 based on target price estimates from nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.

AbbVie Inc. netted $49.35 based on dividends plus a mean target price estimate from eleven analysts less broker fees. The Beta number showed this estimate subject to volatility 93% more than the market as a whole.

The average net gain in dividend and price was nearly 8.4% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 27% less than the market as a whole.

All 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.

Graphs and charts were compiled by R&R, LLC from data derived from www.finance.yahoo.com; analyst mean target price by Thompson/First Call in Yahoo Finance.

Source: Coke Leads Aristocrat Dogs With 15% March Upside