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 April 8 were supplemented with analyst 1-yr target projections to produce 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 reveal 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 10% to 40% Upsides
Dog Metrics Extracted Bargains
Thirty small, mid, and large cap monthly return stocks were culled from over 650 equities of all types for this article. Funds, partnerships and preferred shares were excluded but Real Estate Investment Trusts made the list along with common shares.
Ten monthly pay SML Cap dividend equities showing top yields, represented the usual trio out of the nine Yahoo market sectors: financials, utilities, & basic materials. Top dog Armour Residential REIT (NYSE:ARR) was one of three financial sector firms listed. Prospect Capital Corporation (NASDAQ:PSEC) in second, and Fifth Street Finance (NASDAQ:FSC) in seventh.
One utility, Atlantic Power Corp (NYSE:AT) placed third by yield. Finally, six basic materials concerns placed fourth through sixth, and eighth through tenth Pacific Coast Oil Trust (NYSE:ROYT); QR Energy LP (NYSE:QRE); LinnCo LLC (LNCO); Linn Energy LLC (LINE); Hugoton Royalty Trust (NYSE:HGT); Permian Basin Royalty Trust (NYSE:PBT) to complete the April 8 MoPaySML top dog list.
Actionable Conclusion (2): MoPaySML Were Mixed Down as Dow Dogs Fought Off Bears
MoPaySML top ten dogs dropped in both price and dividend since March 24. Total single share price of the top ten decreased 0.6% for the period. Aggregate dividend from $10k invested as $1k in each of the top ten dogs fell at a rate of 0.9% to confirm the mixed down signal.
The Dow dogs, meanwhile, turned bearish as projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs rose 6.5% since March 24, while aggregate single share price fell 9.5%. 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. The overhang of $128 or 33% March 5, widened to $150 or 40% March 24, then shrank to $75 or 19% by April 8. Some of the recent move was attributable to Coca-Cola Co. (NYSE:KO) replacing Procter & Gamble (NYSE:PG) in the top ten Dow dog list since March 24.
Actionable Conclusion (3): Wall Street Wizards Weighed 19% 1 yr. Net Gain from Top 20 MoPaySML Dogs By April 8, 2015
Top 20 dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of April 8, 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 number of shares were then multiplied by projected annual 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 20143. 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 dividends.
Yahoo projected nearly 11% 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 13% 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 19% to 47.5% by April 8, 2015
Five 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 time the dog strategy for this collection as graded by Wall St. wizards was 50% accurate.
Ten probable profit generating trades were revealed by Thompson/First Call in Yahoo Finance into 2015:
Enduro Royalty Trust (NYSE:NDRO) netted $475.14 based on dividends plus mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 70% less than the market as a whole.
Linn Co., LLC netted $364.47, based on dividend plus mean target price estimates from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.
Pengrowth Energy Corp (NYSE:PGH) netted $298.40, based on dividend plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 65% greater than the market as a whole.
Pacific Coast Oil Trust netted $292.64 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.
Linn Energy LLC netted $284.38 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 32% less than the market as a whole.
Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) netted $281.17 based on a mean target price estimate from nine analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 24% less than the market as a whole.
American Realty Capital (ARCP) netted $264.67 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 16% opposite the market as a whole.
Prospect Capital Corp netted $204.70 based on estimates from eleven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 15% less than the market as a whole.
Stellus Capital Investment (NYSE:SCM) netted $199.30 based on estimates from six analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 97% less than the market as a whole.
QR Energy LP netted $190.50 based on dividends plus the mean of annual price estimates from eleven analysts less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.
The average net gain in dividend and price was 28.6% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to average volatility 50% 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 late 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, FSC, PGH, CSCO, CVX, GE, INTC, MCD, 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.