Put TICC On Your January Dividend Dog Watch List

| About: TICC Capital (TICC)

Summary

Top ten financials showed annual yield from 16.22% to 25.95%. Thirty showed yield from 12.45% to 25.95% as of January 13 market close. TICC was tops.

Top Ten financial dividend dogs by yield, RAS, PSEC, AMTG, NRZ, CG, ARR, NYMT, PNNT, WMC, & TICC, retreated after December as did Dow dogs.

Ten top financial upsides averaged 54.1% with net gains averaging 69.43% as of January 13 analyst 1yr. targets. Top thirty financial upsides averaged 36.66%.

Analyst targets forecast 1yr. net gains ranging from 53.77% to 102.92% for HTS, FSC, CG, RESI, NRZ, PNNT, PSEC, RAS, NCT, & TICC.

$5k invested in the lowest priced five of ten top yield financial sector dividend stocks showed 19.31% more net gain than $5k invested in all ten.

How Financial SML Dogs Managed

Yield (dividend / price) results from here verified by Yahoo Finance were calculated as of January 13, 2016 for Small, Mid, & Large cap Financial stocks. 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. Those yield results led to the actionable conclusions discussed below.

Fifty For Money

Since late 2011 this report series has applied dog dividend methodology to uncover possible buy opportunities in each of eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes). In the past two years the series expanded to report (1) dividend yield; (2) price upside; (3) net gain results based on analyst 1 yr. target projections.

This article was intended to reveal bargain stocks to buy and hold up to one year. See Dow 30 article for explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), 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 Metered Financial Stocks by Yield

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Top ten financial sector dogs showing the biggest dividend yields by this screen as of January 13, 2026 represented five industries: (1) closed end fund - debt [a business development company -BDC]; (2) mortgage investment; (3) residential REIT; (4) asset management [including one BDC]; (5) diversified REIT.

Top financial sector stock by yield, TICC Capital Corp (NASDAQ:TICC) [1] was the BDC listed a closed end fund - debt. In second place, Western Asset Mortgage Capital Corp (NYSE:WMC) (2) was listed as the lone Mortgage Investment industry firm. WMC, however, describes itself as a REIT.

Three asset management firm representatives placed third, sixth, and ninth: PennantPark Investment Corp (NASDAQ:PNNT) [3], The Carlyle Group (NASDAQ:CG) [6], and Prospect Capital Corporation (NASDAQ:PSEC), the BDC [9].

New York Mortgage Trust Inc (NASDAQ:NYMT) [4] was the tops of four residential REITs. The other three residential REITs placed fifth, seventh, and eighth: Armour Residential REIT (NYSE:ARR) [5]; New Residential Investment Corp (NYSE:NRZ) [7]; Apollo Residential Mortgage Inc, (NYSE:AMTG)[8].

Finally, one diversified REITs placed tenth, RAIT Financial Trust (NYSE:RAS) [10] to complete the top ten January financial sector dogs by yield.

Top Financial Dividend vs. Price Results Conformed To Those of The Dow Dogs

Graphs below compared relative strengths of the top ten financial sector dogs by yield as of market close 1/13/2016 with those of the Dow industrials index. Annual dividend history from $10,000 invested as $1k in each of the ten highest yielding stocks along with the total single share price of those ten stocks made the data points shown in green for price and blue for dividends.

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Actionable Conclusions: (2) Financial Dogs Retreated As (3) Dow Dogs Did Too

Financial sector dogs fell back as dividend increased while price fell again after November/December. Dividend from $10k invested as $1k in each of the top ten dogs soared 7.6% to mid-January while total single share price fell 17.34% for the period, flashing the bearish retreat.

Similarly, Dow dogs retreated as their dividend jumped wile price slumped for the period. Projected annual dividend from $10k invested as $1K in each of the top ten rose nearly 3%. At the same time, aggregate single share price dropped almost 10% to confirm the Dow retreat.

The Dow dogs overbought condition (in which aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten) shrank.

[I invite you to sign on to my premium site, The Dividend Dog Catcher, to share my discussion about how the Dow (short of tossing out IBM) could, in one move, return to a normal balance where dividends from 10 $1k investments can again exceed the aggregate single share price of those top ten stocks.]

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Actionable Conclusion (3): Dow Dogs Stay Overbought

The overhang was $239 or 62% for February; widened to a record gap of $388 or 102% in March; shrank back to $291 or 79% for April; widened to $320 or 90% to begin May; soared to the new record $406 or 112% in June.

The Dow bubble deflated as Dupont replaced IBM in the ten slot of the top ten for July to peg the gap at $269 or 71%, then inflated again as IBM replaced Pfizer to widen the gap to $331 or 85% for August. September brought some sanity back to the runaway Dow when the gap stood at $279 or 67%. October increases in price by CVX and XOM pushed the gap to $334 or 85%.

November changed out MCD for WMT, and GE for KO. The resulting price over dividend gap went to $303 or 78%. As of December 4 the gap stood at $302 or 78%. Come January 12, prices of the ten Dow top dogs fell, and dividends rose, to push the overbought gap down to $215 or 53%.

This gap between high share price and low dividend per $1k invested defines the Dow over-bought condition. Meaning these are low risk and low opportunity Dow dog stocks.

Conversely, the financial dog chart shows them to be much higher risk and higher yield. Furthermore, the financials are better price gain potential pups compared to those of the Dow this month.

Wall Street Wizard Writings

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 2016 out of 30 selected by yield. The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts have usually provided the most accurate mean target price estimates.

Actionable Conclusion: (1) Analysts Estimated 54.1% Average Price Upsides For Ten January Financial Dogs

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To quantify top dog rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high yield "dog" metrics, analyst mean price target estimates were used as another tool to dig out bargains.

Actionable Conclusions: Wall St. Wizards Wanted (2) A 36.23% Average Upside; (3) A 36.65% Average 1 yr. Net Gain from Top 30 January Financial Dogs

Financial sector dogs were graphed below to show relative strengths by dividend and price as of January 13, 2016 and those projected by analyst mean price target estimates to the same date in 2016.

A hypothetical $1000 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 median target price was used to gauge the stock upside to 2017.

Historic prices and actual dividends paid from $1000 invested in each of the thirty highest yielding stocks and the aggregate single share prices of those thirty stocks divided by 3 created the data points for 2016. 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 2017 data points green for price and blue for dividends.

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Analyst targets reported by Yahoo! Finance forecast 26% less dividend from $10K invested as $1k in ten dogs in this group while aggregate single share price for those ten was projected to increase by over 31.6% 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 of 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 stocks movement opposite of market direction.

Actionable Conclusion (4): Analysts Asserted 53.77% to 102.92% Net Gains for Ten Financial Dividend Dogs Into January 2017.

Six of the ten top dividend yielding healthcare dogs were verified as being among the ten gainers for the coming year based on analyst 1 year target prices. So this month the dog strategy for the financial sector as graded by Wall St. wizards was 60% accurate.

Ten probable profit generating trades were revealed by Thompson/First Call in Yahoo Finance for 2016:

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TICC Capital Corp. was projected to net $1029.22 based on a median target price estimate from three analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 77% less than the market as a whole.

Newcastle Investment (NYSE:NCT) was projected to net $775.80 based on dividends plus a mean target price estimate from four analysts less broker fees. The Beta number showed this estimate subject to volatility 64% more than the market as a whole.

RAIT Financial Trust was projected to net $718.74 based on dividends plus a mean target price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 73% more than the market as a whole.

Prospect Capital Corporation was projected to net $697.84 based on a median target price estimate from nine analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 74% less than the market as a whole.

PennantPark Investment Corp was projected to net $686.74 based on a median target price estimate from ten analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 22% more than the market as a whole.

New Residential Investment Corp was projected to net $683.92 based on dividends plus mean target price estimates by eleven analysts less broker fees. The Beta number showed this estimate subject to volatility 28% more than the market as a whole.

Altisource Residential Corporation (NYSE:RESI) was projected to net $662.03 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 57% more than the market as a whole.

The Carlyle Group was projected to net $601.79, based on dividend plus mean target price estimates from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 109% more than the market as a whole.

Fifth Street Finance (NASDAQ:FSC) was projected to net $548.70, based on dividends plus mean target price estimates from thirteen analysts less broker fees. The Beta 3% opposite the market as a whole.

Hatteras Financial Corp (NYSE:HTS) was projected to net $537.71, based on dividends plus mean target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 84% less than the market as a whole.

The average net gain in dividend and price was estimated at 69.43% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 2% more than the market as a whole.

Dog Metrics Extracted Bargains

Ten small, mid, and large cap financial equities were culled by yield from over 70 choices from here. Yield (dividend / price) results verified by Yahoo Finance did the ranking.

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As you know, top ten financial sector dogs showing the biggest dividend yields by this screen as of January 13, 2026 represented five industries: (1) closed end fund - debt [a business development company -BDC]; (2) mortgage investment; (3) residential REIT; (4) asset management [including one BDC]; (5) diversified REIT.

Actionable Conclusions: (1) Analysts Assert 5 Lowest Priced of Ten Highest Yield Financial Dividend Dogs Deliver 73.91% VS. (2) 61.95% Net Gains by All Ten by January 13, 2017

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$5000 invested as $1k in each of the five Lowest priced stocks in the top ten financial dividend kennel by yield were predicted by analyst 1 year targets to deliver 7.76% more net gain than $5,000 invested as $.5k in each of the ten. The second lowest priced financial dividend dog, TICC Capital Corp , was projected to deliver the best net gain of 102.92%.

Lowest priced five financial dividend dogs for January 13 were: RAIT Financial Trust; TICC Capital Corp; New York Mortgage Trust Inc.; PennantPark Investment Corp; Prospect Capital Corporation, with prices ranging from $2.22 to $6.11.

Higher priced five financial dividend dogs for January 13 were: Western Asset Mortgage Capital Corp; New Residential Investment Corp.; Apollo Residential Mortgage Inc.; The Carlyle Group; ARMOUR Residential REIT Inc., whose prices ranged from $9.67 to $20.15.

This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, can also be used to find the more rewarding dogs in the Financial sector.

The added scale of projected gains based on analyst targets contributed a unique element of "market sentiment" gauging upside potential. It provided a here and now equivalent of waiting a year to find out what might happen in the market. Its also the work analysts got paid big bucks to do.

Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.

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.

The stocks listed above were suggested only as possible reference points for a small, mid, and large cap financial equities dog dividend stock investment research process in mid-October, 2015. 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.

See my instablog for specific instructions about how to best apply the dividend dog data featured in this article. --Fredrik Arnold

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.dividend.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance.

Disclosure: I am/we are long ARR, FSC, GE, PFE, VZ.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.