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Summary

  • 10 top monthly pay (MoPay) SML dividend dogs projected 1 yr. analyst mean target price upsides averaging near 17% as of May 21.
  • MoPaySML dogs ran from bears as Dow dogs became mixed down after mid-May.
  • Analysts projected average 25% 1 yr. net gains for ARCP, LNCO, PSEC, LINE, HLSS, ROYT, FSC, SCM, QRE, and GAIN.
  • Consider these stocks as starting points for your late May MoPaySML dog dividend stock purchase research.

Yield (dividend / price) results from here verified by Yahoo Finance for monthly dividend paying small, mid, and large cap (MoPaySML) stocks as of market closing prices May 21 were supplemented with analyst 1-yr target projections to reveal four actionable conclusions discussed below. Small cap firms were valued at $200M to $2B; mid cap firms were worth $2B to $10B; large caps were valued north of $10B.

Wall Street Wizard Weightings

One-year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment revealed 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 have provided the most accurate mean target price estimates.

Actionable Conclusion (1) Ten MoPaySML Dividend Dogs Pursued 7.65% to 32.14% Upsides

Thirty For the Money

This article revealed 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 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 a trio from the nine Yahoo market sectors: financials, basic materials, and utilities. Top dog Armour Residential REIT (NYSE:ARR) was one of four financial sector firms listed. Others were Prospect Capital Corporation (NASDAQ:PSEC) second, Fifth Street Finance (NASDAQ:FSC) seventh, and Stellus Capital Investment Corporation (NYSE:SCM), tenth.

Two utilities, Just Energy Group, Inc. (Canada) (NYSE:JE), and Atlantic Power Corp (NYSE:AT), placed third and fourth by yield. Finally, four basic materials concerns placed fifth, sixth, eighth, and ninth: Pacific Coast Oil Trust (NYSE:ROYT); QR Energy LP (NYSE:QRE); LinnCo LLC (NASDAQ:LNCO); Linn Energy LLC (NASDAQ:LINE) to complete the May 21 MoPaySML top dog list.

Actionable Conclusion (2): MoPaySML Dogs Ran From Bears As Dow Dogs Were Mixed Down

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MoPaySML top ten dogs increased in dividend 3% since May 13 while total single share price of the top ten fell 1.4% for the period to continue a bearish trend.

Dow dogs showed a mixed down sign as projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs dropped 0.08% since May 13, while aggregate single share price fell 3.1%. 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) narrowed a touch. The overhang of $128 or 33% March 5, widened to $150 or 40% March 24, shrank to $75 or 19% by April 8, gapped to $180 or 49% as of April 16, inched down to $173 or 47% May 2, widened to $188 or 51% May 13, then narrowed again to $170 or 46% May 21. Some of the recent move was attributable to Microsoft Corp. replacing Merck & Co. Inc. in the top ten Dow dog list after May 13.

Actionable Conclusion (3): Wall Street Wizards Wished 17.4% 1 yr. Net Gain from Top 20 MoPaySML Dogs By May 21, 2015

Top 20 dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of May 21, 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 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 dividends.

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Yahoo numbers showed 7.4% 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 9.7% 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 14.3% to 38.3% by May 21, 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 time the dog strategy for this collection as graded by Wall St. wizards was 70% accurate.

Ten probable profit generating trades were revealed by Thomson/First Call in Yahoo Finance into 2015:

American Realty Capital (NASDAQ:ARCP) netted $382.94 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 13% opposite the market as a whole.

Linn Co., LLC netted $356.05 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.

Prospect Capital Corp netted $306.61 based on estimates from ten analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 14% less than the market as a whole.

Linn Energy LLC netted $276.92 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 34% less than the market as a whole.

Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) netted $271.49 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.

Pacific Coast Oil Trust netted $229.04 based on dividends plus a mean target price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 46% opposite the market as a whole.

Fifth Street Finance netted $203.66, based on dividend plus mean target price estimates from twelve analysts less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.

Stellus Capital Investment netted $170.92 based on estimates from five 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 $165.47 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 33% less than the market as a whole.

Gladstone Investment Corporation (NASDAQ:GAIN) netted $142.76 based on dividends plus mean target price estimate from three analysts less broker fees. A Beta number was not available for GAIN.

The average net gain in dividend and price was 25% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to average volatility 51% 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-May, 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.

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

Source: 10 Monthly Pay May Dogs Measure 7.7% To 32% Upsides