WDC Stays As Nasdaq Alpha Dog For March

| About: Western Digital (WDC)

Summary

10 NASDAQ index March yield leaders - MSFT, KHC, VIAB, INTC, MAT, CSCO, QCOM, WDC, STX, & VOD - averaged 4.07%. Both NASDAQ and Dow dogs charged after February.

47 NASDAQ 100 dividend payers yield ranged from 0.53% to 7.38% as of March 18. NASDAQ top ten average cost per annual dividend $1 is $25.58. Dow averages $26.41.

Upside and net gains of 22.48% and 23.47% were calculated for the top ten. WDC at 32.6% & 34.9% led. Four NASDAQ pups stumbled to the downside averaging -10%.

Top ten gainers were CMCSA, AVGO, KHC, SYMC, VOD, AAPL, NTES, GILD, AMGN, & WDC. Losses were charted for CA, PAYX, NTAP, & FAST.

Ten top yield NASDAQ stocks projected 33.76% LESS net gain from $5k invested in the lowest priced five than from $5K in all ten.

NASDAQ Top Dogs For March

NASDAQ 100 Index members paying dividends were tallied as of market closing prices March 18. Yield (dividend / price) results for 47 dividend paying NASDAQ stocks as stacked against analyst 1-yr target projections led to the actionable conclusions as discussed below.

Actionable Conclusion (1) 10 Top NASDAQ Dogs Cast 2.88% to 7.38% Yields as of March 18

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; S&P Aristocrats; Consumer Goods; NASDAQ 100; Champions; Contenders; Challengers; CCC Combined; and Global. Bonus reports cover Bad Boy AllStars, and Sector Leaders.

Forty-Seven For the Money

This article was written to reveal bargain stocks to buy and hold up to one full 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 Marked NASDAQ 100 Stocks by Yield

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NASDAQ states:

"The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies."

Again, just three of nine sectors were represented in the top ten NASDAQ dogs by yield as of March 18, 2016 per IndexARB.com data: technology; services; consumer goods.

Technology put seven technology firms in the top ten by yield. Tops for tec and overall was Vodafone Group plc (NASDAQ:VOD) [1]. The remaining six tec firms placed second, through fifth, seventh, and tenth: Seagate Technology (NASDAQ:STX) [2]; Western Digital (NASDAQ:WDC) [3]; QUALCOMM (NASDAQ:QCOM) [4]; Cisco Systems (NASDAQ:CSCO)[5]; Intel (NASDAQ:INTC) [7]; Microsoft (NASDAQ:MSFT) [10].

Two consumer goods representatives placed in the sixth and ninth slots, Mattel (NASDAQ:MAT) [6], and Kraft Heinz (NASDAQ:KHC) [9]. Finally, a lone service rep placed eighth, Viacom B (NASDAQ:VIAB) [8], and completed the top ten NASDAQ 100 dogs by yield for March.

NASDAQ Dividend vs. Price Results Shadowed Those Of Dow Dogs

Top ten NASDAQ 100 dogs compared to those of the Dow by yield 3/18/2016. Annual dividend projected from $10,000 invested as $1K in each of the ten highest yielding stocks and total single share price of those ten stocks created the data points shown in green for price and blue for dividend.

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Actionable Conclusions: (1) NASDAQ 100 Dogs Charged And(2) Dow Dogs Did Too After February

NASDAQ 100 top ten dividend payers crossed over to the overbought zone as they declined in dividend and inclined in price after February. Aggregate single share price arose 5.7% to rise above the track of aggregate dividend from $10k invested, which fell 8% to confirm the bullish charge.

Dow dogs also charged to widen their overbought condition. Aggregate single share price for the ten soared 16% between February 22 and March 18, while annual dividend from $10k invested as $1K in each of the top ten dropped 6% according to IndexArb.

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As mentioned, the Dow dogs overbought condition (where aggregate single share price of the ten exceeded projected annual dividend from $10k invested as $1k each in those ten) expanded after February.

Actionable Conclusion (3): Dow Dogs Get Way Overbought

The overhang was $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 8 the gap stood at $292 or 75%. Come January 20, Boeing moved up to the ten so price of the ten Dow top dogs swelled, and dividend shrank, to push the overbought gap back up to $351 or 91.5%. The influx of CSCO and INTC technology pushed consumer goods stalwarts P&G and KO out of the top ten to shrink the gap to $270 or 66% as of February 22. However, P&G reclaimed slot ten in March to join big dogs IBM and Boeing to put the gap to an record of $402 or 105%.

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. The Dow top ten average price per dollar of annual dividend was $26.41.

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Shadowing the DOW the NASDAQ ten, tracked into overbought territory. The value of dividends from $1k investments in each fell below the aggregate single share price of those stocks. The NASDAQ dog chart showed how normal could be achieved. (Notice the double crossing points in July and now in March where dividends moved above price in July and back below again this month ) The NASDAQ top ten average price per dollar of annual dividend was $25.58 as of March 18.

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NASDAQ Dogs Upside

Results from IndexArb.com tallied for 47 NASDAQ 100 Index members paying dividends as of market closing prices March 18, 2016 were stacked against analyst mean target price projections one year out. The results led to the actionable conclusions continuing below.

Actionable Conclusions: (4) 10 Top NASDAQ 100 Dogs Displayed 22.48% Average Upsides Per Analyst Target Guesses For March 2017. (5) Four NASDAQ Pups Were also Found To Average 10% Downsides

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Actionable Conclusion (6): Wall St. Wizards Cast An 8.66% Average 1 yr. Upside & (7) A 9.25% Average Net Gain for Top 30 NASDAQ 100 Dogs To March 18, 2017

Top 30 dogs on the NASDAQ 100 index stock list graphed below showed relative strengths by dividend and price as of March 18, 2016 and those projected by analyst median price target estimates to the same date in 2017.

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 was then multiplied by projected annual dividend amounts to find the dividend return. Thereafter the analyst mean target price was used to gauge each stock's upside to 2017.

Historic prices and actual dividends paid from $1000 invested in each of the 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 on the chart below: green for price and blue for dividend.

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Yahoo reported Thomson/First Call analyst survey numbers predicted a 7.4% lower dividend from $10K invested as $1k in the average ten of this group, while aggregate single share price of those ten was predicted to increase 12.4% in the coming year. Notice that the 2016-17 graph shows price above dividend. Apparently analysts believe the Dow overbought condition will remain the NASDAQ 100 into 2017.

Actionable Conclusion (8): Analysts Asserted 10 NASDAQ 100 Dividend Dogs Would Net 16.97% to 34.88% By March 2017

Three of the top ten dividend yielding NASDAQ 100 dogs were detected among the top ten gainers for the coming year based on analyst 1 year target prices. Therefore, the past month dog strategy (as graded by Wall St. wizards) was 30% accurate.

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Western Digital was projected to net $348.83 based on dividends plus a median target price estimate from twenty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 22% more than the market as a whole.

Amgen Inc. (NASDAQ:AMGN) was projected to net $279.64 based on a mean target price estimate from seventeen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 35% more than the market as a whole.

Gilead Sciences (NASDAQ:GILD) was projected to net $274.78 based on a mean target price estimate from twenty analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 39% more than the market as a whole.

NetEase (NASDAQ:NTES) was projected to net $274.58 based on a median target price estimate from eighteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.

Apple, Inc. (NASDAQ:AAPL) was projected to net $228.87 based on dividends plus median target price estimate from thirty-nine analysts less broker fees. The Beta number showed this estimate subject to volatility 36% greater than the market as a whole.

Vodafone Group plc (NASDAQ:VOD) was projected to net $236.20 based on dividends plus the mean of annual price estimates from two analysts less broker fees. The Beta number showed this estimate subject to volatility 20% less than the market as a whole.

Symantec (NASDAQ:SYMC) was projected to net $186.99 based on dividends plus a median target price estimate from eighteen analysts less broker fees. The Beta number showed this estimate subject to volatility equal to the market as a whole.

The Kraft Heinz Corporation was projected to net $181.27 based on dividends plus median target price estimate from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 80% less than the market as a whole.

Broadcom Limited (NASDAQ:AVGO) was projected to net $176.34 based on dividends plus median target price estimates from twenty-eight analysts less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.

Comcast A (NASDAQ:CMCSA) was projected to net $169.76 based on a median target price estimate from twenty-seven analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 3% more than the market as a whole.

The average net gain in dividend and price was 23.47% on $10k invested as $1k in each of these dogs. This gain estimate was subject to average volatility 1% greater than the market as a whole.

Actionable Conclusion (9): (Bear Alerts) Analysts Predicted Four NASDAQ Dogs With Net Losses of -3.55% To -22.69% By March, 2017

Four probable losing trades revealed by Thomson/First Call in Yahoo Finance in 2017 were:

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CA Technologies (NASDAQ:CA) was projected to lose $35.45 based on dividend and a median target price estimate from ten analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 40% less than the market as a whole.

Paychex, Inc. (NASDAQ:PAYX) was projected to lose $50.56 based on dividend and a median target price estimate from eleven analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 1% less than the market as a whole.

NetApp (NASDAQ:NTAP) was projected to lose $80.94 based on dividend and a median target price estimate from twenty-five analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 3% less than the market as a whole.

Fastenal Company was projected to lose $226.93 based on dividend and a median target price estimate from six analysts including $20 of broker fees (which the dividend more than covered). The Beta number showed this estimate subject to volatility 12% less than the market as a whole.

The average net gloss in dividend and price was 9.85% on $4k invested as $1k in each of these four bear bait dogs. This gain estimate was subject to average volatility 14% less than the market as a whole.

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

Several of these NASDAQ pups qualify as valuable catches! Check out the now 31 Dogs Of The Week (DOTW) found on The Dividend Dog Catcher premium site. A top performing dog of the quarter has been named. Click here to subscribe. Or for a free copy of the quarterly report and analysis of the winning Arnold Q1 pick, send your e-mail address, ticker symbol for your favorite dividend stock, and name of your favorite March Madness team to: fredrika120@gmail.com. Remember: E-mail, ticker, team!

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.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; analyst mean target prices by Thomson/First Call in Yahoo Finance.

Disclosure: I am/we are long CSCO, INTC, 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.