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Summary

  • 10 top monthly pay (MoPay) SML dividend dogs displayed steep 1 yr. analyst mean target price upsides that averaged 15% as of July 25. One dog dropped 23% down.
  • MoPaySML dogs remained mixed up as Dow dogs became bearish last week.
  • Analysts projected average 23.3% 1 yr. net gains from ROYT, ARCP, HLSS, LNCO, ARP, GOOD, ARR, LINE, PSEC, & STB; and a 1 yr. net loss of 15.7% for AT.
  • Consider these stocks as starting points for your intra-July MoPaySML dividend dog stock buy/sell research.

Yield (dividend / price) results from here verified by Yahoo Finance for monthly dividend paying small, mid, & large cap (MoPaySML) stocks as of market closing prices July 25 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 $2B to $10B; large caps were valued above $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 4.7% to 49.3% Upsides; One Showed A 23% Downside

Forty-Five For the Money

This article was researched 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 Extracted Bargains

Forty-five small, mid, and large cap monthly dividend paying stocks were culled from over seven hundred equities of all sizes for this article. Funds, 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 basic materials, financials, & utilities from the nine Yahoo market sectors. Top dog Pacific Coast Oil Trust (NYSE:ROYT) led five basic materials concerns after suffering a huge price drop last week. Others placed third, fifth, seventh, and eighth: Hugoton Royalty Trust (NYSE:HGT); Atlas Resource Partners, L.P. (NYSE:ARP); LinnCo LLC (NASDAQ:LNCO); and QR Energy LP (NYSE:QRE).

Second dog, ARMOUR Residential REIT (NYSE:ARR) was one of four financial sector firms listed. Other financials were Prospect Capital Corporation (NASDAQ:PSEC) in fourth place, Fifth Street Finance (NASDAQ:FSC) sixth, and Stellus Capital Investment Corporation (NYSE:SCM), ninth.

Finally, one utility, Atlantic Power Corp. (NYSE:AT), placed tenth to complete the July 25 MoPaySML top dog list.

Actionable Conclusion (2): MoPaySML Dogs Mixed Up As Dow Stumbled Into Late-July

(click to enlarge)

MoPaySML top ten dogs since July 18 increased 0.03% in dividend from $10k invested as $1K in each of the top ten, while total single share price of the top ten rose 0.83% for the period to continue their mixed up condition.

Meanwhile, Dow dogs stumbled bearishly showing 1.5% higher annual dividend from $10k invested as $1K in each of the top ten Dow dogs since July 18, while aggregate single share price dropped more than .4%. 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) shrank. Historically, an overhang of $75 or 19% on April 8 widened to $173 or 47% May 1; widened to $193 or 53% June 6; spread to $222 or 62% July 3; shrank to $218 or 60% July 11; widened to $221 or 61.5% July 18; then shrank to $215 or 59% July 25. Much of the recent move was attributable to price swoons by several of the top ten, most notably by T, MCD, & KO; but especially GE.

Actionable Conclusion (3): Wall Street Wizards Wanted 15.13% 1 yr. Net Gain from Top 20 MoPaySML Dogs By July 25, 2015

Top 20 dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of July 25, 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.

(click to enlarge)

Yahoo analyst numbers projected 6% 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 7.4% 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 Augured 10 MoPaySML DiviDog Net Gains of 14.2% to 61.6% by July 25, 2015

Five 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 week the dog methodology for this collection as graded by Wall St. wizards was 50% accurate.

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

Pacific Coast Oil Trust netted $615.83 based on dividends plus a mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 45% opposite the market as a whole.

American Realty Capital (NASDAQ:ARCP) netted $255.70, based on dividend plus mean target price estimates from six analysts less broker fees. The Beta number showed this estimate subject to volatility 14% opposite the market as a whole.

Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) netted $238.84 based on a mean target price estimate from eight 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.

LinnCo, LLC netted $221.97, based on dividend plus mean target price estimates from seven analysts less broker fees. The Beta number showed this estimate subject to volatility 88% less than the market as a whole.

Atlas Resource Partners netted $193.61 based on dividends plus the mean of annual price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 51% less than the market as a whole.

Gladstone Commercial Corporation (NASDAQ:GOOD) netted $189.45 based on estimates from two analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 40% less than the market as a whole.

ARMOUR Residential REIT netted $168.68 based on dividends plus mean target price estimate from eight analysts less broker fees. The Beta number showed this estimate subject to volatility 61% less than the market as a whole.

Linn Energy LLC (NASDAQ:LINE) netted $158.38 based on a mean target price estimate from twelve 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.

Prospect Capital Corp. netted $149.09 based on estimates from nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 17% less than the market as a whole.

Student Transportation Inc. (NASDAQ:STB) netted $142.37 based on a mean target price estimate from three analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 22% less than the market as a whole.

The average net gain in dividend and price was 19.8% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to volatility 51% less than the market as a whole.

Actionable Conclusion (5): (Bear Alert) Analysts Forecast AT Mo Pay DiviDog to Post Net Loss of 15.7% By July 25, 2015

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

Atlantic Power Corp. was projected to lose $157.34 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 58% 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-July, 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 indexArb.com; Dividend.com; Yahoo Finance; analyst mean target price by Thompson/First Call in Yahoo Finance.

Source: 6 Monthly Pay Dividend Dogs Flaunt 10% To 49% Late-July Upsides