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Summary

  • Ten top yielding "Sin Stocks" on a new 17 stock "Sindex" show respectable price upsides from 6.97% to 21.56% as of April 10 (per analyst mean target price).
  • A bear mauled top ten Sindex dogs (by yield) along with the dogs of the Dow.
  • Analysts project average 17.5% 1-year net gains from RMCF, GSK, DEO, SIX, THI, LVS, RGC, RCI, DRI and SJR.
  • Consider this as a starting point for your stock purchase research for Sindex stocks.

The list of seventeen "Sindex" stocks below was created by screening for industries with public companies that made or sold toxic, harmful, addictive or "sinful" products. These included consumer goods, services and healthcare sector firms. Not included were addictive, harmful, technology, basic materials, financial or industrial goods companies. That list is fit for a future post. Sorting top stocks in each industry by yield narrowed the field to seventeen from over 100 candidates.

Below, Arnold top Sindex dog selections for April by yield, price upsides and net gain upsides were disclosed step by step. Four actionable conclusions were drawn.

Actionable Conclusion (1): 10 Sindex Dogs Stalk 6.97% to 21.58% Upsides Come 2015

The chart above used one-year mean target prices set by brokerage analysts matched against April 11 closing price to compare ten Sindex stocks showing the highest upside price potential into 2015 out of 17 selected by industry. 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, Sindex.

Thirty For the Money

This article was posted 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's system works to find bargains in any collection of dividend paying stocks. Utilizing analyst price upside estimates expanded the stock universe to include popular growth equities, if desired.

Dog Metrics Sorted Dividend Sindex Stocks by Yield

The Sindex list of seventeen companies above was sorted by yield as of April 11 to reveal the top ten.

Ten Sindex dogs that promised the biggest dividend yields into April included firms from three of nine market sectors: consumer goods, healthcare and services. The top stock, Vector Group (NYSE:VGR), was one of four from the consumer goods sector. The other consumer goods firms, Philip Morris International (NYSE:PM), B&G Foods (BGS) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF) placed sixth, seventh and tenth.

The balance of the top ten included one healthcare firm, GlaxoSmithKline PLC (NYSE:GSK), in second place. The remaining five firms in the Sindex were services: Six Flags Entertainment (NYSE:SIX) in third place, Regal Entertainment Group (NYSE:RGC) in fourth, Darden Restaurants (NYSE:DRI) placed fifth, Shaw Communications (NYSE:SJR) in eighth, Rogers Communications (NYSE:RCI) in ninth place and completed the representation of market sectors in the Sindex top ten by yield.

Dividend vs. Price Results Compared to Dow Dogs

Periodic strength of ten top Sindex dogs by yield was graphed below as of market closing prices through 4/11/2014 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 history of those ten stocks created the data points shown in green for price and blue for dividend.

(click to enlarge)

Actionable Conclusion (2): Sindex And Dow Dogs Retreated

Sindex top dividend payers saw a bearish signal as dividends inclined while price dropped after March. Sindex top ten dog dividends grew 1.2% while price sank 0.1%.

Gloom descended on the Dow dogs as projected annual dividends from $10k invested as $1K in each of the top ten increased 7.7% since March. At the same time, aggregate single share price fell 10.4% to affirm the bearish sign. 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 decreased. The overhang was $145 or 38% for January, retreated to $125 or 33% in February, grew to $160 or 43% in March, then shrunk again to $75 or 18.5% for April.

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 is another tool used to dig out bargains.

Actionable Conclusion (3): Wall St. Wizards Guess 11.9% Net Gain from 17 Sindex Dogs Into 2015

The seventeen dogs of the Sindex were graphed below as of April 11, 2014, compared to analyst mean price target estimates for the same date in 2015.

A hypothetical $1,000 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 $17,000 invested as $1k in each of the highest yielding stocks and the aggregate single share prices of those twenty stocks divided by 1.7 created data points for 2014. Projections based on estimated increases in dividend amounts from $1,000 invested in the seventeen highest yielding sin stocks and aggregate one-year analyst target share prices from Yahoo Finance divided by 1.7 created the 2015 data points green for price and blue for dividend.

(click to enlarge)

Yahoo projected a 9% lower dividend from $20K invested as $1k in each stock in this group while aggregate single share price was projected to increase over 11.4% 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 were considered optimal for a valid estimate.

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 (4): Analysts Forecast Ten Sindex Dogs to Net 9.2% to 23.3% By April 2015

Seven of the ten top dividend yielding Sindex dogs were verified as being among the ten net gainers for the coming year based on analyst 1-year target prices. So this month the Sindex dog strategy as graded by Wall St. wizards was 70% accurate.

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

Rocky Mountain Chocolate Factory netted $233.44 based on a mean target price estimate from two analysts combined with projected annual dividends less broker fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.

GlaxoSmithKline PLC netted $218.99 based on dividends plus a mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 29% less than the market as a whole.

Diageo plc (NYSE:DEO) netted $206.16 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 17% less than the market as a whole.

Six Flags Entertainment netted $203.31 based on dividends plus mean target price estimate from six analysts less broker fees. The Beta number showed this estimate subject to volatility 72% more than the market as a whole.

Tim Hortons (THI) netted $202.73 based on a mean target price estimate from eleven analysts combined with projected annual dividends less broker fees. The Beta number showed this estimate subject to volatility 21% less than the market as a whole.

Las Vegas Sands (NYSE:LVS) netted $188.52 based on a mean target price estimate from twenty-two analysts combined with projected annual dividends less broker fees. The Beta number showed this estimate subject to volatility 93% more than the market as a whole.

Regal Entertainment Group netted $166.72 based on dividends plus a mean target price estimate from twenty analysts less broker fees. The Beta number showed this estimate subject to volatility 8% less than the market as a whole.

Rogers Communications netted $138.17 based on a mean target price estimate from ten analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.

Darden Restaurants netted $98.45 based on dividends plus mean target price estimate from twenty-two analysts less broker fees. The Beta number showed this estimate subject to volatility 7% more or less the market as a whole.

Shaw Communications netted $92.09 based on a mean target price estimate from nine analysts combined with projected annual dividends less broker fees. The Beta number showed this estimate subject to volatility 55% less than the market as a whole.

The average net gain in dividend and price was nearly 17.5% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 4% less than the market as a whole.

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 Sindex dog dividend stock purchase or sale 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.

Disclosure: I am long 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.

Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: 10 Of 17 Top Sin Stocks Stalk 7% To 22% Upsides