Yield (dividend / price) results from here verified by Yahoo Finance for small, mid, & large cap Tech sector stocks as of market closing prices July 11 compared with analyst 1-yr target projections led to five actionable conclusions discussed below.
Wall Street Wizard Weights
One-year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment were used to cull ten stocks showing the highest upside price potential into 2015 out of 20 selected by yield. One Techno dog showed a downward declination. The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts was considered optimal for a valid mean target price estimate.
Actionable Conclusion (1) Ten Technology Dividend Dogs Average 21.26% July Upsides
Thirty For the Money
Since late 2011 this report series has applied dog dividend methodology to uncover possible buy opportunities in each of eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes). In the past year the series expanded to report (1) dividend yield; (2) price upside; (3) net gain results based on analyst 1 yr. target projections.
Dog dividend methodology is 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. Now named Dogs of the Dow, O'Higgins system also works to find bargains in any collection of dividend paying stocks. Utilizing analyst price upside estimates has expanded the stock lists to include popular growth equities, if desired.
Dog Metrics Screened Technology Sector Stocks by Yield
Just three industries were represented by the top ten technology dogs by yield: wireless communications; telecom services - domestic; telecom services - foreign. Top dog, NTELOS Holdings Corp (NASDAQ:NTLS) was one of two wireless communications firms. The other wireless firm, Portugal Telecom S.A. (NYSE:PT), placed tenth.
Four domestic telecoms were slotted two, six, seven, and nine: Windstream Corp (NASDAQ:WIN); Consolidated Communications Holdings (NASDAQ:CNSL); Frontier Communications (NASDAQ:FTR); CenturyLink Inc. (NYSE:CTL). Four telecom service - foreign firms made the list in third through fifth, and eighth places: Vodafone Group (NASDAQ:VOD); France Telecom (NYSE:ORAN); Nortel Inversora S.A. (NYSE:NTL); Philippine Long Distance Telephone Co.; these completed the top technology ten for July.
Technology Sector Dividend vs. Price Results Compared to Dow Index Dogs
Relative strengths of the top ten technology dogs graphed below by yield were plotted as of market close 7/11/2014 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 prices of those ten stocks created the data points shown in green for price and blue for dividends.
Actionable Conclusion (2): Technology Top Ten Mixed It Up As Dow Dogs Got Bullish for June
Dividend from $10k invested as $1k in each technology top ten dog went up as did the aggregate single share price of those ten through June. These concurrent up ticks produced a truly mixed up signal. Dividend popped up at a rate of 8% while total single share price popped up 46.7% in that period. Much of this mixed up action was produced by an influx of fresh equities, many global, in this month's dividend.com technology sector by yield top ten screen.
Dow dogs continued to frolic as projected annual dividend from $10k invested as $1K in each of the top ten declined 1% into July. At the same time aggregate single share price moved up 3.7% to confirm the bullish turn. 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 increased. The overhang of $111 or 29% in January, grew to $131 or 35% in February, expanded to $136 or 36% in March, widened again to $180 or 49% for April, went up to $187 or 51% in May, expanded to $193 or 53% for June, then swelled to $217 or 60% for July.
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 Street Wizards Wrested A 15.5% Net Gain from Top 20 Technology Dogs For July 2015
Top twenty sector dogs were graphed below to show relative strengths by dividend and price as of July 11, 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 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.
Yahoo projected 9.5% lower dividend from $10K invested in this group while aggregate single share price was projected to increase by 8% 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 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 stocks movement opposite of market direction.
Actionable Conclusion (4): Analysts Anticipated 10 Technology Sector Dogs to Net 9.1% to Near 72% By July 2015
Just three of the ten top dividend yielding basic materials dogs were verified as being among the ten top net gainers for the coming year based on analyst 1 year target prices. So this month the dog strategy for technology stocks as graded by Wall St. wizards was 30% accurate.
Ten probable profit generating trades revealed by Yahoo Finance into 2015 were:
Earthlink, Inc. (NASDAQ:ELNK) netted $718.54 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 3% more than the market as a whole.
Vodafone Group netted $462.79 based on estimates from four analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.
Compuware Corporation (NASDAQ:CPWR) netted $280.73, based on dividends plus a mean target price estimate by three analysts less broker fees. The Beta number showed this estimate subject to volatility 18% greater than the market as a whole.
NTELOS Holdings Corp netted $277.30 based on estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 10% greater than the market as a whole.
Telefonica Brasil SA (NYSE:VIV) netted $173.91 based on estimates from nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 6% less than the market as a whole.
China Mobile (NYSE:CHL) netted $164.79, based on dividends plus a mean target price estimate from four analysts less broker fees. The Beta number showed this estimate was subject to volatility 85% less than the market as a whole.
Quality Systems (NASDAQ:QSII) netted $132.59, based on dividends plus a mean target price estimate from twenty analysts less broker fees. The Beta number showed this estimate was subject to volatility 51% less than the market as a whole.
Philippine Long Distance Telephone Co. (NYSE:PHI) netted $124.52, based on dividends plus a mean target price estimate from two analysts less broker fees. The Beta number showed this estimate was subject to volatility 16% more than the market as a whole.
BCE Inc. (NYSE:BCE) netted $106.03 based on dividends plus the mean of annual price estimates from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 56% less than the market as a whole.
Verizon Communications. (NYSE:VZ) netted $91.29 based on estimated dividends plus mean target price estimate from twenty-five analysts less broker fees. The Beta number showed this estimate subject to volatility 96% less than the market as a whole.
Average net gain in dividend and price was 25.3% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 28% less than the market as a whole.
Actionable Conclusion (5): (Bear Alert) Analysts Forecast CTL DiviDog to Post Net Loss of 4.2% By July 2015
Two probable losing trades revealed by analysts reported by Thompson/First Call in Yahoo Finance for 2015 were:
CenturyLink, Inc. was projected to lose $42.03 based on dividend and a mean target price estimate from ten analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 28% less 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: The author is long VZ, T, MSFT, CSCO, INTC, GE, PFE. 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.