The best of the best dividend stocks are discerned by some investors utilizing a once per year trading system triggered by yield, called the "Dogs of the Index". This strategy described below gives the investor the tactical advantage of obtaining all the wisdom and knowledge of the well-paid wizards of investment and publishing for free, merely by choosing an existing collection of equities built by the experts.
Charts below for the NYSE International100 Index reveal how low yielding stocks whose prices increase (or whose dividends decrease) as opportunities to be sold off once each year in order to sweep gains and reinvest the seed money into higher yielding stocks in the same index.
Two key metrics determine the yields that rank the NYSE International 100 dog stocks: (1) Stock price; (2) Annual dividend. Dividing the annual dividend by the price of the stock declares the percentage yield by which each dog stock is ranked. Thus the investor is able to follow, trade, and await the results from an investment in the lowest priced, highest yielding five or ten stocks in the index.
Investment empowerment from the NYSE International 100
Listed below are the top thirty NYSE International100 stocks by yield as of 2/10/12 per Yahoo Finance data.
The NYSE states, "The NYSE International 100 Index tracks the largest 100 non-U.S. common stocks listed on the New York Stock Exchange. As of year-end 2004, the companies represented have a combined market capitalization (float-adjusted) of $4.3 trillion. Together they represent over one-quarter of the total market capitalization of all common stocks listed on the NYSE."
As of February 10, five of the top ten stocks paying the biggest dividends in this index are technology firms. Nokia (NYSE:NOK) last topped this list December 30 but now gave way to Telefonica SA (NYSE:TEF). NOK yield plummeted as its forward looking divided estimate on Yahoo dropped from $.48 to $.18 while the share price rose nearly 3%. Of these top thirty NYSE International dividend payers, seven are technology companies, three consumer goods, seven financial, one services, eight basic materials, no industrial, two health care, two utilities, and no conglomerates represent the sectors.
Vertical moves by NYSE International 100 index dividend payers
Since October three different firms exchanged places at the top of the list, YPF, NOK, and TEF. Color code shows: Yellow) firms listed in first position at least once between October 2011 and February 2012; (Cyan Blue) firms listed in tenth position at least once between October 2011 and February 2012; (Magenta) firms listed in twentieth position at least once between October 2011 and February 2012; (Green) firms listed in thirtieth position at least once between October 2011 and February 2012. Duplicates are depicted in color for highest ranking attained.
Click charts below to enlarge.
There were no additions or removals in the top 30 NYSE International list by yield. Nevertheless many stocks exchanged positions. HSBC Holdings (HBC) gained 15.3% in price and dropped down five slots since December. At the same time Nokia dropped from the top to slot twenty six as its estimated forward looking dividends were cut 62.5% from $.48 to $.18 annually.
Total S.A. (NYSE:TOT) made a significant vertical move of nineteen slots between November and December by virtue of a dividend estimated by Morningstar, Inc. to increase from $1.37 per share annually in November to $2.51 in February. The stock then dropped three slots in 40 days when its price jumped 5%.
Dividend vs. Price Results for NYSE International Index Top 10
Below is a graph of the relative strengths of the top ten NYSE International 100 Index stocks by yield as of February 10, 2012. Using four months of historic projected annual dividend history from $1000 invested in the ten highest yielding stocks each month and the total single share prices of those ten stocks creates the data points for each month shown in green for price and blue for dividends.
Our NYSE International 100 Index top ten graph above shows bull market convergence as dividends from $1k invested in the top ten moved down towards the rising aggregate total single share prices for these stocks.
Will the bullish trend continue in March for this index? Stay tuned.
Disclaimer: This article is for informational and educational purposes only and shall 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 are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding or selling same.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.