10 Super Sin Dogs Dig 7.6% To 35% Upsides

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 |  Includes: APL, CM, EROC, FCX, FSC, GEO, NMFC, NSU, OCIP, PER, ROYT, UAN, WIN
by: Fredrik Arnold

Summary

Ten top yielding "Super Sin" stocks on a world class 28 stock "Super Sindex" flaunted robust price upsides from 7.6% to 35.19% as of April 22 (per analyst mean targets).

A bull chased those top ten Super Sindex dogs (by yield) while dogs of the Dow ran from a bear.

Analysts project average 24.3% 1 yr. net gains for NSU, GEO, PER, EROC, ROYT, FCX, APL, CM, FSC and OCIP.

Consider these as starting points for your stock purchase research for Super Sindex stocks.

The list of twenty-eight "Super Sindex" stocks below was created by screening the industries with public companies that have historically committed acts or made substances and devices to maim, kill, tempt, harm, addict or scam us with "sinful" products and services. These included conglomerates, technology, basic materials, financial, and industrial goods companies. Sorting top stocks in each industry by yield narrowed the field to twenty-eight from over 1000 candidates.

Below, Arnold top Super 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 a 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. Based on their affronts to humanity the author added Sindex and Super Sindex reports.

Twenty-eight 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 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 Super Sindex Stocks by Yield

The Super Sindex list of twenty-eight companies above was sorted by yield as of April 22 to reveal the top ten.

Ten Super Sindex dogs that promised the biggest dividend yields in April included firms from four of nine market sectors as listed here: basic materials; financials; technology; conglomerates. The top stock, Sandridge Permian Trust (NYSE:PER), was one of five from the basic materials sector. The other basic materials firms, Eagle Rock Energy Partners L.P. (NASDAQ:EROC), OCI Partners LP (NYSE:OCIP), Atlas Pipeline Partners LP (NYSE:APL), and CVR Partners L.P. (NYSE:UAN) placed second, sixth, eighth and ninth.

The balance of the top ten included three financials, in third, fifth, and tenth places: Pacific Coast Oil Trust (NYSE:ROYT); Fifth Street Finance (NASDAQ:FSC); The Geo Group, Inc. (NYSE:GEO). The remaining two firms were technology, and a conglomerate: Windstream (NASDAQ:WIN), in fourth place; New Mountain Finance Corp. (NYSE:NMFC), in seventh place, completed the representation of market sectors in the Super Sindex top ten by yield.

Dividend vs. Price Results Compared to Dow Dogs

Periodic strength of ten top Super Sindex dogs by yield was graphed below as of market closing prices through 4/22/2014 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.

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Actionable Conclusion (2): Super Sindex Romped As Dow Dogs Retreated

Super Sindex top dividend payers ran bull-like as dividend dropped while price inclined after March. Super Sindex top ten dog dividend fell 1.7% while price grew 1.7%.

Gloom descended on the Dow dogs as projected annual dividend 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 15.3% Net Gain from 20 Super Sindex Dogs Into 2015

Twenty dogs of the Super Sindex were graphed below as of April 22, 2014 compared to analyst mean price target estimates for 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 super sin 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.

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Yahoo projected 8% lower dividend from $20K invested as $1k in each stock in this group while aggregate single share price was projected to increase over 9% 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 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 Super Sindex Dogs to Net 16% to 37.3% By April 2015

Seven of the ten top dividend yielding Super 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 dividend dog strategy as graded by Wall St. wizards was 70% accurate for the Super Sindex top ten.

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

Nevsun Resources [USA] (NYSEMKT:NSU) netted $372.98 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 37% less than the market as a whole.

The Geo Group, Inc. (GEO) netted $323.40 based on dividends plus a mean target price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 36% less than the market as a whole.

SandRidge Permian Trust (PER) netted $292.52 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 2% greater than the market as a whole.

Eagle Rock Energy Partners L.P. (EROC) netted $278.14 based on dividends plus mean target price estimate from THREE analysts less broker fees. The Beta number showed this estimate subject to volatility 20% less than the market as a whole.

Pacific Coast Oil Trust (ROYT) netted $245.18 based on a mean target price estimate from four analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.

Freeport-McMoRan (NYSE:FCX) netted $207.63 based on a mean target price estimate from nineteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 129% more than the market as a whole.

Atlas Pipeline Partners LP (APL) netted $195.36 based on dividends plus a mean target price estimate from eight analysts less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Canadian Imperial Bank (NYSE:CM) netted $178.99 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 11% less than the market as a whole.

Fifth Street Finance (FSC) netted $175.15 based on dividends plus mean target price estimate from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.

OCI Partners LP netted $159.69 based on a mean target price estimate from three analysts combined with projected annual dividend less broker fees. A Beta number was not available for OCIP.

The average net gain in dividend and price was nearly 24.3% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 21% 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 Super 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 FSC, CSCO, CVX, GE, INTC, MCD, MSFT, PFE, 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.