Global dividend stock prices from Yahoo! Finance tallied as of market closing May 30 were compared with analyst mean target gains one year hence. The results showcased 8 stocks sporting 41.7% average price upsides. These included three basic materials firms, two financial firms, one telecom, a service firm, and one utility.
This report presumed yield (dividend / price) dividend dog methodology applied to any index and compared that index side by side with the Dow. Below, Arnold top Global dividend dog selections for May were disclosed step by step. Five actionable conclusions were drawn.
Actionable Conclusion (1) 8 Global Dividend Dogs Pursued 4.16% to 206.7% Upsides for May While 2 Cast 22% average Downsides
The above chart used one-year mean target prices set by brokerage analysts matched against May 30 closing price to compare ten Global index 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 & Aristocrats; Russell 2000 & 1000; NASDAQ 100; Champions; Challengers; Global. A recent bonus report covered Sin stocks: Sindex AllStars.
Thirty For the Money
Bargain stocks to buy and hold for at least one year as reported below were termed dogs because they were all selected based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991). O' Higgins 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, now named Dogs of the Dow. His 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 Gauged Ten Top Global Stocks
Thirty small, mid, and large cap global equities were culled by yield from 277 common and preferred choices for this article. Small cap firms showed $300M to $2B; mid cap showed $2B to $10B; large showed over $10B in market capitalization.
Ten top global dividend stocks that showed the biggest dividend yields May 30 per Yahoo Finance data represented just four of nine sectors: financial; basic materials; utilities; services.
The list was led by three of seven financial firms, Alto Palermo S.A. [Argentina] (NASDAQ:APSA) was tops. The other six financials placed second, third, and sixth, through ninth: Santander Mexico Fincl Gp SAB deCV ADR [Mexico] (NYSE:BSMX); Administradora de Fondos de Pensiones Provida S.A. [Chile] (NYSE:PVD); Banco Santander, S.A. [Spain] (NYSE:SAN); Barclays Bank Plc ADR (Sponsored) Pref Shs Ser 5 [U.K.] (BCD-PD); HSBC Holdings Plc ADR Ser A Rep 1/40 Pfd Ser A [U.K.] (HSEA); Banco Bradesco S.A [Brazil] (NYSE:BBD).
A lone basic materials firm, Companhia Siderurgica Nacional [Brazil] (NYSE:SID) placed fourth. A lone utility sector dog, Companhia Energetica de Minas Gerais [Brazil] (NYSE:CIG) placed fifth. A single services firm, Fly Leasing Ltd. [Ireland] (NYSE:FLY) was tenth to complete the top ten global dogs by yield.
Dividend vs. Price Results Compared to Dow Dogs
Relative strengths of the top ten global dogs by yield as of market close 5/30/2014 compared to those of the Dow are shown in the graphs and charts below. Projected annual dividend history from $10,000 invested as $1k in each of the ten highest yielding stocks and the total single share prices of those ten stocks created the data points shown in blue for dividend and green for price.
Actionable Conclusion (2): Global & Dow Dogs Retreat
Global dividend payers as of May 30 displayed rising dividend from $10k invested as $1k in each of the top ten stocks while their aggregate single share price dropped to signal a bearish turn. Dividend increased at a rate of 4.3% after April while total single share price dropped nearly 17% for that period. The change was mostly attributable to an overall global stock price decline among the top ten.
Panic hit the Dow dogs as projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs jumped up 0.61% since April. Aggregate single share price dropped 0.24% to confirm the bearish sign. The Dow dogs overbought condition (wherein aggregate single share price of the top ten exceeded projected annual dividend from $1k invested in each of those ten) shrank a bit. The overhang was $145 or 38% for January, then retreated to $125 or 33% in February, swelled to $149 or 40% in March, expanded to $173 or 47% in April, then shrank to $170 or 46% come May. All of this recent panic on the Dow was triggered by general price declines coupled with indexarb.com projecting higher dividends for PFE; INTC; CVX; MSFT.
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. Wizard Wisdom Wrought 20.5% 1 yr. Net Gain from Top 20 Global May Dogs
Top 20 dogs on the global stock list were graphed below to show relative strengths by dividend and price as of May 30, 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 2014.
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.
Yahoo projected a 6% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by over 5% 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): Analysts Forecast 8 Global DiviDogs Net 9.7% to 212.95% Come May 2015
Four of the eight top dividend yielding global dogs were verified as being among the eight gainers for the coming year based on analyst 1-year target prices. So this month the dog strategy for this collection as graded by Wall St. wizards was 50% accurate.
Probable profit generating trades were revealed by Thomson/First Call in Yahoo Finance into 2015:
Companhia Siderurgica Nacional netted $2,129.48, based on dividends plus mean target price estimate from six analysts less broker fees. The Beta number showed this estimate subject to volatility 96% greater than the market as a whole.
Compania Vale Do Rio (NYSE:VALE) netted $474.43 based on estimates from twenty-five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 36% greater than the market as a whole.
Santander Mexico Fincl Gp SAB deCV netted $293.43 based on estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.
Fly Leasing Ltd. netted $231.61 based on estimates from seven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.
CPFL Energia S.A (NYSE:CPL) netted $183.36 based on dividends plus a mean target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to volatility 34% more than the market as a whole.
Ecopetrol SA (NYSE:EC) netted $169.16 based on estimates from twelve analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 28% less than the market as a whole.
Telefonica Brasil SA (NYSE:VIV) netted $152.96, based on dividend plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 6% less than the market as a whole.
Banco Bradesco S.A netted $96.85 based on estimates from seven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 67% more than the market as a whole.
Average net gain in dividend and price was 46.6% on $10k invested as $1k in each of these eight Global dogs. This gain estimate was subject to average volatility 11% more than the market as a whole.
Actionable Conclusion (5): (Bear Alert) Analysts Forecast CIG & GA DiviDogs to Post Net Losses of 16.1% & 18.2% By May 2015
Two probable losing trades revealed by analysts reported by Thomson/First Call in Yahoo Finance for 2015 were:
Companhia Energetica was projected to lose $161.03 based on dividend and a mean target price estimate from two analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 38% more than the market as a whole.
Giant Interactive Group (NYSE:GA) was projected to lose $181.56 based on dividend and a mean target price estimate from four analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 117% more than the market as a whole.
Average net loss in dividend and price including $20 in broker fees was 17.13% on $2k invested as $1k in each of these two Global dogs. This loss estimate was subject to average volatility 78% more than the market as a whole.
Net gain and loss 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 Global dog dividend stock purchase/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, MSFT, 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.