Top 50 Real Estate Sector Dogs Seek 6.8% To 15.7% Yields And Up To 27% Gains For April

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Includes: AGNC, BRG, CHMI, CYS, EARN, GMRE, GZUHY, MTGE, NRZ, NYMT, ORC, PMT, RAS, UNIT, WSR, XIN
by: Fredrik Arnold

Summary

The Real Estate sector has 9 component industries. The top 50 firms selected by yield represented all those industries.

ORC was top dog by yield and BRG led per analyst estimated price growth as calculated 4/19/17.

50 Top Real Estate stocks ranged in estimated yield from 6.8% to 15.7%. Top ten - AGNC, PMT, EARN, NRZ, CHMI, RAS, CYS, NYMT, GZUHY & ORC - averaged 12% yield.

Top ten Real Estate firms by broker target price upsides - GZUHY, MTGE, XIN, GMRE, ORC, WSR, RAS, CHMI, UNIT, & BRG - averaged 17.25% estimated gains.

$5k invested in the lowest-priced five April top-yield Real Estate stocks showed 11.42% more net gain than from $5k invested in all ten.Little Dogs ruled the Real Estate sector.

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." More precisely, these are, in fact, best called "underdogs."

Top 50 April Real Estate Sector Dogs By Yield

Actionable Conclusion (1) Dog Metrics Listed 10 Top Dividend Real Estate Stocks By Yield

Top ten Real Estate Sector dogs selected 4/19/17 by top yield represented three of nine constituent industries. Top yielding stock, Orchid Island Capital (ORC) [1] was the tops of four diversified REIT industry representatives.

The other three diversified REITs placed fourth, fifth, and ninth: CYS Investments (CYS) [4]; RAIT Financial Trust (RAS) [5]; PennyMac Mortgage Investments (PMT) [9].

The lone General industry representarive placed second, Guangzhou R&F Properties (OTCPK:GZUHY) [2].

The rest of the top ten was composed of residential REIT representatives in third, sixth, seventh, eighth, and tenth: New York Mortgage Trust (NYMT) [3]; Cherry Hill Mortgage Investment (CHMI) [6]; New Residential Investment (NRZ) [7]; Ellington Residential (EARN) [8]; AGNC Investment (AGNC) [10], to complete the top ten April Real Estate dogs by yield.

Real Estate Dividend Vs. Price Results Compared To Dow Dogs

Graphs below compared relative strengths of the top ten Real Estate dogs by yield as of market close 4/19/2017 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.

Real Estate Top Dog Dividends For April

The aggregate single share price for the top ten Real Estate dogs was 11% compared to the dividend derived from $10k invested as $1k in each of the ten, which was 89% of their combined total. A prime dividend dogcatcher goal is to source stocks whose dividends from $1K invested exceed their single share price. The top ten Real Estate dogs get kudos for their high dividend accomplishment.

Meanwhile, Dow dogs show an overbought condition (in which aggregate single share price of the ten exceeded projected annual dividend from $10k invested as $1k each in those ten).

Actionable Conclusion (3): Dow Dogs Stay Overbought

The aggregate single share price for the top ten Dow dogs was 68% while the dividend derived from $10k invested as $1k in each of the ten was 32% of the combined totals. The top ten Dow dogs can take a time-out for their inflated stature.

This gap between high share price and low dividend per $1k (or overbought condition) means, no matter which chart you read, these are low risk and low opportunity Dow dogs. The Dow top ten average price per dollar of annual dividend for April 19, 2017 was $27.22.

In contrast, the Real Estate list was composed of higher risk and higher opportunity dividend pups.

Lower priced than Dow dogs, the Real Estate top ten showed that lower cost throws more dividend as their top ten average price per dollar of annual dividend was $8.42 as of April 19. That's 31 cents versus the full dollar of Dow investment price to reap a dollar of annual dividend.

Actionable Conclusions: (4) Top Ten Real Estate Dogs Showed 3.59% To 19.73% Upsides To April, 2018; (5) Downsides From Lowest Ten Were -4.23% To -11.26%.

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

Actionable Conclusions: Wall St. Wizards Calculated (6) A 1.04% Median Target Price Upside and 10.8% Net Gain From 30 Real Estate Upside Dogs Come April 2018

Real Estate top thirty stocks were graphed below to show relative strengths by dividend and price as of April 19, 2017, and those projected by analyst mean price target estimates to the same date in 2018.

A hypothetical $1,000 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 mean target price gauged the stock price upsides and net gains including dividends, less broker fees, as of 2018.

Historic prices and actual dividends paid from $10,000 invested as $1k in each of the stocks and the aggregate single share prices of those ten stocks created data points for 2017. Projections based on estimated dividend amounts from $1,000 invested in the ten stocks and aggregate 1-year analyst target share prices from Yahoo Finance created the 2018 data points green for price and blue for dividend.

YChart analysts' median 1-year targets projected a 0.3% lower 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 0.66% in the coming year. Notice, price lower than dividend in the coming year forecasts no Dow-like overbought conditions for the Real Estate top yield dogs.

The number of analysts contributing to the target price estimate for each stock was noted in the next to the last column on the charts. Three to nine analysts was optimal for a valid projection estimate. Estimates provided by one analyst were generally 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 stock's movement opposite of market direction.

Actionable Conclusion (7): Analysts Predicted 15.9% To 24.85% Net Gains For Ten Real Estate Dogs By April 2018

Four of ten top dividend-yielding Real Estate dogs were verified as being among the top ten of thirty gainers for the coming year based on analyst 1-year target prices (as tinted gray in the chart above). So this yield-based forecast for Real Estate dogs was graded by Wall St. wizards as 40% accurate.

Ten probable profit-generating trades were revealed in YCharts for April 2018:

Bluerock Residential (BRG) was projected to net $268.18, based on dividends, plus mean target price estimates from eight analysts, less broker fees. No Beta number was available for BRG.

Uniti Group (UNIT) was projected to net $248.44, based on dividends, plus one mean target price estimate from seven analysts, less broker fees. No Beta number was available for UNIT.

Cherry Hill Mortgage Investment (CHMI) was projected to net $186.19, based on dividends, plus median target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to volatility 63% less than the market as a whole.

RAIT Financial Trust (RAS) was projected to net $180,00, based on dividends, plus a mean target price estimate from three analysts, less broker fees. The Beta number showed this estimate subject to volatility 72% more than the market as a whole.

Whitestone (WSR) was projected to net $168.77, based on target price estimates from eight analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 5% less than the market as a whole.

Orchid Island Capital (ORC) netted $163.04 based on mean target price estimates from two analysts plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 48% less than the market as a whole.

Global Medical REIT (GMRE) was projected to net $138.01, based on dividends plus a median target estimate from five brokers, less broker fees. The Beta number showed this estimate subject to volatility 1632% opposite the market as a whole.

Xinyuan Real Estate Co (XIN) was projected to net $133.85, based on median target estimates from one analyst, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 40% more than the market as a whole.

MTGE Investment (MTGE) was projected to net $121.21, based on a mean target price estimate from 8 analysts, plus their estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 61% less than the market as a whole.

Guangzhou R&F Properties (OTCPK:GZUHY) was projected to net $117.84 based on dividends, alone with no target estimates brokers, just broker fees. The Beta number showed this estimate subject to volatility 73% less than the market as a whole.

The average net gain in dividend and price was estimated at 17.26% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 134% opposite the market as a whole.

Analysts Forecast A 11.42% Advantage For 5 Highest Yield, Lowest Priced Real Estate Sector Stocks To April 2018

Ten top Real Estate dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.

As noted above, top ten Real Estate dogs selected 4/19/17 showing the highest dividend yields represented three of nine industries constituting the sector.

Actionable Conclusions: (8) Analysts Projected 5 Lowest-Priced of the Top Ten Highest-Yield Real Estate Dogs Delivering 9.71% Vs. (10) 8.72% Net Gains by All Ten by April, 2018

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Industrials kennel by yield were predicted by analyst 1-year targets to deliver 11.42% more gain than $5,000 invested as $.5k in all of those ten. The sixth lowest priced Real Estate top yield dog, Cherry Hill Mortgage Invesgtment (CHMI), was projected to deliver the best net gain of 18.62%.

The five lowest-priced Real Estate top yield dogs for April 19 were: RAIT Financial Trust (RAS); New York Mortgage Trust (NYMT); CYS Investments (CYS); Orchid Island Capital (ORC); Ellington Residential (EARN), with prices ranging from $3.05 to $14.93.

Five higher-priced Real Estate dogs for April 19 were: Cherry Hill Mortgage Investments (CHMI); PennyMac Mortgage Investment (PMT); New Residential Investment (NRZ); AGNC Investment (AGNC); Guangzhou R&F Properties (OTCPK:GZUHY), whose prices ranged from $17.46 to $26.22.

The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added 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. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.

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

The net gain/loss 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.

One of these top 50 Real Estate pups by yield qualifies as a valuable catch! Find it among the now 52 Dogs of the Week I found on The Dividend Dog Catcher premium site, or the thirty-three Dogs of the Week II now available. Click here to subscribe or get more information. To suggest a favorite stock for the next crowd-sourced follower article in May and to get a free copy of the monthly top dogs, the quarterly reports, and the dog of the year winner and runner-up underdog from the 52 Dogs of the Week (DOTW) I portfolio, plus a glimpse at the top dogs in DOTW II, send your e-mail address, ticker symbol of your favorite dividend stock, and the name of your favorite team of any sport or activity to me by clicking on the envelope icon next to my name below the headline of this article. Remember: E-mail, ticker, team! Root for the Underdog.

Stocks listed above were suggested only as possible reference points for your Healthcare dog stock purchase or 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; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in YahooFinance. Dog photo: freshome.com

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

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.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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