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Summary

  • 10 top monthly pay (MoPay) SML dividend dogs displayed 1 year analyst mean target price upsides averaging 15.7% as of August 29. Two averaged 18.5% to the downside.
  • Top ten MoPay SML and Dow dogs by yield were both bullish to close August.
  • Analysts projected average 25% 1 yr. net gains from PGH, CPG, NDRO, ROYT, HLSS, BTE, ARP, ARCP, ARR, LINE, and PSEC; BBD and AT averaged 13% down as bear bait.
  • Consider these stocks as starting points for your September MoPaySML dividend dog 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 August 29 were augmented by analyst 1-yr target projections to unveil five actionable conclusions discussed below. Small cap firms were valued at $200M(illion) to $2B(illion); 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 30 selected by yield. Two stocks showed losses by the same metric. The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts have demonstrated the most accurate mean target price estimates.

Actionable Conclusion (1) Ten MoPaySML Dividend Dogs Cast 7% to 25% Upsides; Two Showed 14% & 23% Downsides

Forty-Six For the Money

This article revealed bargain stocks to buy and hold for perhaps 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 showed how high yielding stocks whose prices increased (and whose dividend yields therefore decreased) could be sold off once a year to sweep gains to be reinvested in higher yielding stocks in the same index. Now 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, as desired.

Dog Metrics Extracted Bargains

Forty-six 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 here but Real Estate Investment Trusts and Business Development Companies populated the list along with other common shares.

Ten monthly pay SML Cap dividend equities showing top yields, represented the usual trio of financials, basic materials, & utilities from the nine Yahoo market sectors. Top 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), seventh.

Second dog, Hugoton Royalty Trust (NYSE:HGT), led five basic materials firms. The other four basic materials companies placed third, fifth, ninth and tenth: Pacific Coast Oil Trust (NYSE:ROYT); Atlas Resource Partners, L.P. (NYSE:ARP); LinnCo LLC. (NASDAQ:LNCO); Linn Energy, LLC. (NASDAQ:LINE).

Finally, one utility, Atlantic Power Corp (NYSE:AT), placed eighth to complete the August 29 MoPaySML top dog list.

Actionable Conclusion (2): MoPaySML Dogs & Dow Dogs Stayed Fairly Bullish Last Week

(click to enlarge)

MoPaySML top ten dogs to end August dropped 1.5% in dividend from $10k invested as $1K in each, while total single share price of those ten jumped 10% for the period to confirm a bullish signal.

Meanwhile, Dow dogs climbed slightly higher bullishly showing 0.9% lower dividend from $10k invested as $1K in each of the top ten Dow dogs since mid- August, while aggregate single share price inclined 0.9%. 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) expanded again. 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 $185 or 49% August 8; broadened to $190 or 51% as of August 15; widened to $197 or 53% August 22; then widened again to $205 or 56% as of August 29.

Actionable Conclusion (3): Wall Street Wizards Weighed A 12.77% 1 yr. Net Gain from Top 30 MoPaySML Dogs By August 29, 2015

Top 30 dogs on the MoPay stock list were graphed below to show relative strengths by dividend and price as of August 29, 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 thirty stocks divided by 3 created the data points for 2014. Projections based on estimated increases in dividend amounts from $1000 invested in the thirty highest yielding stocks and aggregate one-year analyst target share prices from Yahoo Finance divided by 3 created the 2015 data points green for price and blue for dividends.

(click to enlarge)

Yahoo analyst numbers projected 5.3% 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 7.2% 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 Ascribed Net Gains of 18.7% to 39.4% by August 29, 2015 for top 10 MoPaySML Dogs

Four of the ten top dividend yielding MoPaySML dogs were verified as being among the top ten gainers out of 30 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 40% accurate.

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

Pengrowth Energy Corp. (NYSE:PGH) was projected to net $393.77 based on dividends plus a mean target price estimate from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 77% greater than the market as a whole.

Crescent Point Energy (NYSE:CPG) was projected to net $293.04 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 30% more than the market as a whole.

Enduro Royalty Trust (NYSE:NDRO) was projected to net $281.14 based on estimates from three analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 67% less than the market as a whole.

Pacific Coast Oil Trust was projected to net $278.30, based on dividend plus mean target price estimates from three analysts less broker fees. The Beta number showed this estimate subject to volatility 1% opposite the market as a whole.

Home Loan Servicing Solutions Ltd. (NASDAQ:HLSS) was projected to net $262.65 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 17% less than the market as a whole.

Baytex Energy Corp (NYSE:BTE) was projected to net $260.11 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 74% greater than the market as a whole.

Atlas Resource Partners was projected to net $235.17 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 52% less than the market as a whole.

American Realty Capital Properties Inc (ARCP) was projected to net $224.68 based on dividends plus the mean of annual price estimates from six analysts less broker fees. The Beta number showed this estimate subject to volatility 18% opposed to the market as a whole.

ARMOUR Residential REIT was projected to net $192.77 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.

Prospect Capital Corp was projected to net $188.54 based on estimates from eight analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 17% less than the market as a whole.

The average net gain in dividend and price was 25.2% on $10k invested as $1k in each of these ten MoPay dogs. This gain estimate was subject to volatility 24% less than the market as a whole.

Actionable Conclusion (5): (Bear Alerts) Analysts Foresee BBD & AT Mo Pay Dogs to Post Net Losses of 10.2% & 15.3* By August 29, 2015

Probable losing trades revealed by analysts reported by Thomson/First Call in Yahoo Finance for 2015 were:

Banco Bradesco S.A (NYSE:BBD) was projected to lose $102.24 based on dividend and a mean target price estimate from seven analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 67% greater than the market as a whole.

Atlantic Power Corp was projected to lose $153.33 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 44% 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 early September, 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.