5 Dividend Stocks Out Of Favor With Analysts

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Includes: FGP, MGEE, PNY, TNH, WHX
by: Dividend Dog

Are analysts always right? Should do savvy investors take their recommendations as dogma, or should they search for top stocks among their sell recommendations? Analysts do have an edge over the rest of us in making short-term earnings estimates and not much else. They are closer to firm management than the rest of us, but their recommendations should not be dogmatically followed.

The following stocks are analyst sell recommendations which pay dividend yields that exceed the 10-year treasury yield and also exceed the dividend yield of the S&P 500. Their details follow:

Ferrellgas Partners LP (NYSE:FGP) recently traded at $16.85 per share. At this price level, the stock has a 11.9% dividend yield. For 10 out of the past 10 fiscal years, a share of FGP paid a total of $20.00 in dividends. Of these dividend payments, a total of $10.00 were paid in the last five years.

FGP shareholders have endured a -11.2% change in share price over the past year. At present, shares of this small cap stock trade at a price-to-book ratio of 84.3 and a price-to-sales multiple of 0.5 (trailing twelve months). No price-to-earnings ratio could be calculated from a net loss over the past year. Over the past decade, shareholders savored a 39.8% average annual return on equity.

MGE Energy Inc. (NASDAQ:MGEE) recently traded at $46.15 per share. At this price level, the stock has a 3.3% dividend yield. For 10 out of the past 10 fiscal years, a share of MGEE paid a total of $13.93 in dividends.

MGEE shareholders have sustained a -1.3% change in share price over the past year. At present, shares of this small cap stock trade at a price-to-book ratio of 1.9, a price-to-earnings multiple of 16.8, and a price-to-sales multiple of 1.9 (trailing twelve months). Over the past decade shareholders savored a 11.7% average annual return on equity.

Piedmont Natural Gas Co. Inc. (NYSE:PNY) recently traded at $32.78 per share. At this price level, the stock has a 3.5% dividend yield. For 10 out of the past 10 fiscal years, a share of PNY paid a total of $9.67 in dividends. Of these dividend payments, a total of $5.35 were paid in the last five years.

PNY shareholders have endured a -3.5% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 2.4, a price-to-earnings multiple of 20.9, and a price-to-sales multiple of 1.7 (trailing twelve months). Over the past decade shareholders savored a 12.3% average annual return on equity.

Terra Nitrogen Company, L.P. (NYSE:TNH) recently traded at $191.44 per share. At this price level, the stock has a 7.3% dividend yield. For 10 out of the past 10 fiscal years, a share of TNH paid a total of $44.36 in dividends. Of these dividend payments, a total of $38.57 were paid in the last five years.

TNH shareholders have enjoyed a 14.0% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 13.3, a price-to-earnings multiple of 13.6, and a price-to-sales multiple of 4.8 (trailing twelve months). Over the past decade shareholders savored a 44.6% average annual return on equity.

Whiting USA Trust I (NYSE:WHX) recently traded at $18.82 per share. At this price level, the stock has a 15.7% dividend yield. For 3 out of the past 10 fiscal years, a share of WHX paid a total of $9.49 in dividends.

WHX shareholders have enjoyed a 12.4% change in share price over the past year. At present, shares of this micro cap stock trade at a price-to-book ratio of 5.2, a price-to-earnings multiple of 6.7, and a price-to-sales multiple of 6.5 (trailing twelve months). WHX does not have a positive 10-year average equity return.

The analysts should be commended for not rating any of these stocks as buys. TNH could be a buy recommendation if valuations become a bit more attractive, since it has a long-term track record of delivering equity returns and dividends. It has demonstrated commitment to growing shareholder wealth and providing shareholder income. MGEE and PNY have such track records but they would need to have much lower valuations to be serious buy candidates. WHX does not have such a strong track-record.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing. Moreover, this research does NOT constitute a guarantee.