Utilities Dividend Dogs: A 32% Advantage For 5 Lowest Price High Yield December 26 Issues

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Includes: BEP, BIP, CPL, JE, NGG, PEGI, SMLP, SPH, SXE, TAC
by: Fredrik Arnold

Summary

Top ten utilities dividend stocks by yield showed 32.15% higher net gain from a $5k investment in the lowest priced five than from an equal amount invested in all ten.

Annual dividends divided by closing stock prices as of December 26 determined yields. Analyst net targets were used to calculate gains one year hence.

The five lowest priced high yield utilities stocks were: JE; TAC; CPL; SXE; PEGI. The five higher priced stocks completing the ten were: BEP; BIP; SMLP; SPH; NGG.

Consider these stocks as starting points for your December utilities stock investment research.

Top Ten For the Money

This article refines and distinguishes an earlier report that revealed Small, Mid, & Large cap utilities bargain stocks to buy and hold perhaps as long as one year. 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.

This article was written 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 Extracted Bargains

Ten small, mid, and large cap utilities equities were culled by yield from 50 choices from here. Yield (dividend / price) results verified by Yahoo Finance did the ranking.

Ten utilities sector stocks that showed the biggest dividend yields into November, per Yahoo Finance data, represented four industries: diversified; gas; foreign; electric.

Tops by yield was one of four diversified firms, Southcross Energy Partners, L.P. (NYSE:SXE) [1]. The three other diversified firms placed second, fourth, and ninth: Just Energy Group, Inc. [Canada] (NYSE:JE) [2]; TransAlta Corp. (NYSE:TAC) [4]; Brookfield Renewable Energy Partners LP (NYSE:BEP) [9].

Two gas firms placed third, and seventh: Suburban Propane Partners (NYSE:SPH)[3]; National Grid PLC (NYSE:NGG) [7].

A lone designated foreign utility, CPFL Energia S.A [Brazil] (NYSE:CPL), in slot five, moved just north of mid-pack.

Three electric firms claimed three of five slots at the bottom of the list, six, eight, & ten: Summit Midstream Partners LP (NYSE:SMLP) [6]; Pattern Energy Group Inc. (NASDAQ:PEGI) [8]; Brookfield Infrastructure Partners L.P. (NYSE:BIP) [10]. Thus, these electrics completed the December utilities top ten dog list by yield.

Actionable Conclusions: (1) Analysts Allege 5 Lowest Priced of Top Ten Highest Yield Utilities Dividend Dogs Deliver 37.36% VS. (2) 28.27% Net Gains by All Ten by December 26, 2015

$5000 invested as $1k in each of the five Lowest priced stocks in the top ten utilities dividend kennel by yield were predicted by analyst 1 year targets to deliver 15.38% more net gain than $5,000 invested as $.5k in each of all ten. The fourth lowest priced utilities dividend dog, Southcross Energy Partners, L.P. , was projected to deliver the best net gain of 55.54%.

Lowest priced five utilities dividend dogs for December 26 were: Just Energy Group, Inc. [Canada] ; Transalta Corp ; CPFL Energia S.A ; Southcross Energy Partners, L.P. ; Pattern Energy Group Inc.; with prices ranging from $5.39 to $25.16.

Higher priced five utilities dividend dogs for December 26 were: Brookfield Renewable Energy Partners LP ; Summit Midstream Partners LP ; Suburban Propane L.P. ; Brookfield Infrastructure Partners L.P. ; National Grid PLC whose prices ranged from $30.02 to $72.41.

This distinction between the five low priced dividend dogs and the general field of ten reflects Michael B. O'Higgins "basic method" for beating the Dow. The added scale of projected gains based on analyst targets adds a unique element of "market sentiment" gauging upside potential. It's a here and now equivalent of waiting a year to find out what will happen in the market. 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 stocks listed above were suggested only as decent starting points for a small, mid, and large cap basic materials equities dog dividend stock investment research process in late-December, 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.dividend.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.