- 8 top global SML dividend dog stocks showed worldly 1-year analyst mean target price upsides averaging 19% as of August 1. One marked a 33.3% downside as bear bait.
- Top ten global SML & Dow Dividend dogs by yield both showed mixed up signals since June.
- Analysts projected average 24.9% 1-year net gains for top 8 SML global stocks as of August 1, 2015. One showed a 28% loss.
- Consider BSMX; VALE; EC; GSK; FLY; TOT; VOD; ESV; CIG as starting points for your global SML dog dividend stock purchase/sale research for August. Note SID remains an analyst favorite.
Yield (dividend/price) results from here verified by Yahoo Finance for small, mid, and large cap Healthcare stocks as of market closing prices as of August 1 compared with analyst 1-year target projections led to six 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 Weights
The results showcased 8 stocks sporting 19% average price upsides. These included four basic materials firms, one financial firm, one technology, one healthcare, and one service firm.
The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts were optimal for a valid mean target price estimate.
Actionable Conclusion (1): 8 Global Dividend Dogs Chased 4.77% to 22.63% Upsides for July While 1 Showed A 33.3% Downside
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, Contenders, & Challengers Combined; Global. Bonus reports covered: Sindex AllStars, and Sector Leaders.
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 Screened 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.
Ten top global dividend stocks that showed the biggest dividend yields August 1 per Yahoo Finance data represented five of nine sectors: financial; utilities; technology; basic materials; services.
The list was led by five financial firms, Santander Mexico Fincl Gp SAB deCV ADR [Mexico] (NYSE:BSMX) was tops. The other four financials in second, through fifth were: Alto Palermo S.A. [Argentina] (NASDAQ:APSA); Banco Santander, S.A. [Spain] (NYSE:SAN); Barclays Bank Plc ADR [U.K.] (BCD.PD); HSBC Holdings Plc ADR [U.K.] (OTCPK:HBCYF).
A lone utility sector dog, Companhia Energetica de Minas Gerais [Brazil] (NYSE:CIG) placed sixth. Two technology firms, Orange [France Telecom] (NYSE:ORAN), and Vodafone Group [U.K.] (NASDAQ:VOD), placed seventh and eighth. One basic materials firm, Ecopetrol SA ADR [Colombia] (NYSE:EC) placed ninth. 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 6/24/2014 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 Dogs Mixed Down As Dow Dogs Charged
Global dividend payers as of August 1 displayed increased dividend from $10k invested as $1k in each of the top ten stocks along with rising aggregate single share price to signal a mixed up move. Dividends rose at a rate of 2% after June while total single share price jumped up 9% for that period.
Meanwhile, the Dow dog mix up since June showed 0.3% higher annual dividend from $10k invested as $1K in each of the top ten Dow dogs since June 18, while aggregate single share price of the ten rose 2.7%. As a result, Dow dogs' overbought condition in which aggregate single share price of the ten exceeded projected annual dividends from $1k invested in each of the ten increased. The overhang of $132 or 35% in January/February, expanded to $180 or 49% for March/April, widened to $193 or 53% for May/June, then gapped to $206 or 56% in July. Much of the recent move was attributable to price bumps by several of the top ten, most notably by VZ, CVX, and MRK.
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 Wizard Wisdom Wrought 9.8% 1-year Net Gain from Top 20 Global July Dogs
Top 20 dogs on the Global stock list were graphed below to show relative strengths by dividend and price as of August 1, 2014, and those projected by analyst mean price target estimates to the same date in 2015.
A hypothetical $1k 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 $1k invested in the twenty highest yielding stocks and aggregate 1-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 1.8% lower dividend from $10K invested in this group, while aggregate single share price was projected to increase by over 4.5% 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 To Net 8.5% to 27.5% By July 2015
Four of the ten 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 Thompson/First Call in Yahoo Finance into 2015:
Santander Mexico Fincl Gp SAB deCV netted $275.29 based on estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 84% less than the market as a whole.
Compania Vale Do Rio (NYSE:VALE) netted $261.94 based on estimates from twenty-six analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 36% greater than the market as a whole.
Ecopetrol SA netted $212.38 based on estimates from fourteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 28% less than the market as a whole.
GlaxoSmithKline PLC (NYSE:GSK) netted $192.37, based on dividends plus mean target price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.
Fly Leasing Ltd. netted $166.31 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.
Total SA (NYSE:TOT) netted $163.62 based on estimates from six analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 35% greater than the market as a whole.
Vodafone Group netted $134.48, based on dividend plus mean target price estimates from three analysts less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.
Ensco plc (NYSE:ESV) netted $84.84, based on dividends plus mean target price estimate from twenty-seven analysts less broker fees. The Beta number showed this estimate subject to volatility 63% greater than the market as a whole.
Average net gain in dividend and price was 53.7% on $6k invested as $1k in each of these six Global dogs. This gain estimate was subject to average volatility 7% less than the market as a whole.
Actionable Conclusion (5): (Bear Alert) Analysts Forecast CIG DiviDog to Post Net Loss of nearly 28% By July 2015
A probable losing trade revealed by analysts reported by Thompson/First Call in Yahoo Finance for 2015 was:
Companhia Energetica de Minas Gerais [Brazil] was projected to lose $279.96 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 34% more than the market as a whole.
Actionable Conclusion (6): Analysts See Net Gains of 127% for SID by July 2015
A note about Compania Siderurgica Nacional [Brazil] (NYSE:SID):
Last month's upside leader dropped out of the top twenty by yield as its share price ramped up through July. However, analysts are still convinced that SID has significant upside potential to net $1,271.51 based on a mean target price of $11.63 from six analysts (with a beta number showing this estimate subject to volatility 96% greater than the market as a whole.) So, despite a paltry dividend yield under 5%, SID would still sit atop both the upside and net gain tables this month, despite not qualifying for the field based on yield.
The net gain 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 index 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 CSCO, GE, INTC, 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.
Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks.