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Are August Challenger Dogs Running On Empty?



  • Top ten Challengers: ENLK; WPZ; WDR; EEP; SSW; SSI; SUN; GMLP; MMLP; MFIN, averaged 11.61% yield August 4. They represented four of nine, or four of eleven, business sectors.
  • Fifty Dividend Dog Challengers (with 5 to 9 years of regular dividend increases) ranged from 4.5% to 16.98% in yield.
  • Top ten Challengers charged gently while Dow dogs mixed up through July. Wall Street analyst 1yr. targets forecast average 6.82% upside and 15.2% net gain from thirty Challengers.
  • Estimated 1-year gains ran 14.5% to 84.75% for TRGP, GMLP, WES, MMLP, CVA, CLNY, TLLP, SUN, WPZ, and MFIN, top ten. Two losers, HPT and CLMS, slumped 4.2% and 11.3%.
  • Ten Top Challenger dividend dogs ranked by yield projected 12% less gain from $5k invested in the lowest priced five than from the same investment in all ten.

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs."

The Challenger Chase

Yield (dividend/price) results from David Fish's Dividend Challengers Index showed the top ten members resided in four of nine Yahoo business sectors [or four of eleven Morningstar sectors]: basic materials [energy] (5); services (3) [industrials (2) & consumer cyclical (1)]; financials (2) [financial services ](2). Those ten stocks posted yields averaging 11.61%.

Top Challenger dog selections for August were reviewed, step by step, below to provide actionable conclusions by yield, target price upsides, and net gains.

Actionable Conclusion (1) 10 Top Dividend Challenger Dogs Put Up 9.04% to 16.98% Yields as of August 4

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; NASDAQ 100; Russell 1000; Russell 2000; Champions; Contenders; Challengers; CCC Combined; and Global. Bonus reports cover Bad Boy AllStars, and Sector Leaders.

Fifty Show 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. Including analyst price upside estimates in the analysis expanded the stock universe to include popular growth equities, as desired.

Dog Metrics Located 50 Leading Challenger Dogs by Yield

David Fish's July 29 Challengers list contained stocks distinguished by paying increasing dividends for 5 to 9 straight years. These, ranked

This article was written by

Fredrik Arnold profile picture
Simple, straightforward 7-step analysis that finds lucrative income stocks.
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators. These are essential tools for catching the most valuable dividend dogs. My dividend dogcatcher premium site in the Seeking Alpha Marketplace shows annual real-time trading results since 2015.

Analyst’s Disclosure: I am/we are long CSCO, 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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