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Summary

  • 10 top monthly pay (MoPay) SML dividend dogs showed strong 1-yr. analyst mean target price upsides averaging 12% as of June 20. One pup cast a downside of 17.%.
  • MoPaySML and Dow dogs ran with bulls the week past.
  • Analysts projected average 19.9% 1-yr. net gains for ARCP, ROYT, HLSS, PSEC, LNCO, FSC, LINE, QRE, MAIN, and SCM; a 1-yr. net loss of 9.8% for AT.
  • Consider these stocks as starting points for your late-June MoPaySML dividend dog stock 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 June 20 were supplemented with analyst 1-yr. target projections to reveal five actionable conclusions discussed below. Small cap firms were valued at $200M to $2B; mid cap firms were worth $2 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. One stock showed a loss by the same metric. 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 Projected 5% to 24.8% Upsides; One Showed A 17.7% Downside

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 dividend-paying stocks were culled from hundreds of equities of all sizes for this article. Funds, partnerships, and preferred shares were excluded, but Real Estate Investment Trusts and Business Development Companies made the list, along with other common shares.

Ten monthly-pay SML Cap dividend equities showing top yields represented the usual trio of financials, utilities, and basic materials from the nine Yahoo market sectors. 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) fifth, and Stellus Capital Investment Corporation (NYSE:SCM) eighth.

Five basic materials concerns placed third, fourth, seventh, ninth, and tenth: Pacific Coast Oil Trust (NYSE:ROYT); QR Energy LP (NYSE:QRE); LinnCo LLC (NASDAQ:LNCO); Linn Energy LLC (NASDAQ:LINE); Hugoton Royalty Trust (NYSE:HGT) respectively. Finally, one utility, Atlantic Power Corp. (NYSE:AT), placed sixth to complete the June 20 MoPaySML top dog list.

June marked the passing of Just Energy (NYSE:JE) as a MoPay dog to the QPay zone. Besides changing frequency of dividends, the company chose to sell assets and cut its dividend to save its financial life.

Actionable Conclusion (2): MoPaySML And Dow Dogs Ran Bullish Into Late-June

(click to enlarge)

MoPaySML top ten dogs dropped in dividend 1.6% since June 13, while total single-share price of the top ten rose 1% for the period to confirm the bullish sign.

Dow dogs romped bullishly by showing lower annual dividend from $10k invested as $1K in each of the top ten Dow dogs, dropping 0.9% since June 13, while aggregate single-share price increased 1.7%. As a result, the Dow dogs' overbought condition (in which aggregate single-share price of the ten exceeded projected annual dividend from $10k invested as $1k each in those ten) swelled. Historically, an overhang of $75, or 19%, on April 8 widened to $173, or 47%, on May 2; widened to $188, or 51%, on May 13; narrowed to $170, or 46%, on May 21; widened to $193, or 53%, on June 6; shrunk to $179, or 49%, on June 13, then swelled to $192, or 53%, on June 20. Much of the recent move was attributable to Microsoft Corp. replacing Coca-Cola Co. at the tail of the top ten Dow dog list since June 13.

Actionable Conclusion (3): Wall Street Wizards Willed 13.5% 1-yr. Net Gain from Top 20 MoPaySML Dogs By June 20, 2015

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

Historical 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.

(click to enlarge)

Yahoo numbers projected 4.2% lower dividend from $10K invested as $1k in the average ten of this group, while aggregate single-share price of those ten was projected to increase by over 5.7% 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 the market direction.

Actionable Conclusion (4): Wall St. Analysts Allege 10 MoPaySML DiviDog Net Gains of 12.3% to 30.7% by June 20, 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 methodology 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 $307.24, based on a mean target price estimate from six analysts, combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 14% opposite the market as a whole.

Pacific Coast Oil Trust netted $253.08, based on dividends plus a mean target price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 45% opposite the market as a whole.

Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) netted $226.23, 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 25% less than the market as a whole.

Prospect Capital Corp. netted $224.92, based on estimates from ten analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 17% less than the market as a whole.

Linn Co., LLC netted $220.00, based on dividend plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.

Fifth Street Finance netted $178.52, based on dividend plus mean target price estimates from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.

Linn Energy LLC netted $156.34, 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.

QR Energy LP netted $151.52, 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 35% less than the market as a whole.

Main Street Capital Corp. (NYSE:MAIN) netted $147.41, based on dividends plus mean target price estimate from six analysts less broker fees. The Beta number showed this estimate subject to volatility 52% less than the market as a whole.

Stellus Capital Investment netted $122.78, 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.

The average net gain in dividend and price was 19.9% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to volatility 64% less than the market as a whole.

Actionable Conclusion (5): (Bear Alert) Analysts Forecast AT Mo Pay DiviDog to Post Net Loss of 9.8% By June 20, 2015

The probable losing trade revealed by analysts reported by Thomson/First Call in Yahoo Finance for 2015 was:

Atlantic Power Corp. was projected to lose $97.75, 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 38% 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/sale research process in late-June, 2014. These were not recommendations.

Gains/declines 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 Thomson/First Call in Yahoo Finance.

Disclosure: The author is long ARR, AT, FSC, CSCO, CVX, GE, INTC, MCD, MSFT, PFE, T, VZ. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Source: 7 MoPay Dividend Dogs Tally 9% To 24.8% Late-June Upsides