Industrials One-Year Likely Gains Led By Shippers, Ports, And Aviation Services For June

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Includes: CUUHF, CVA, DLNG, EIFZF, FTAI, GCTAF, GMLP, HMLP, IEP, MIC, NAP, PCFBY, SFL, TOO, USDP
by: Fredrik Arnold
Summary

TOO led the industrials sector per analyst estimated net gain calculated 6/26/17, and was top dog by yield, too.

The industrials sector has 23 component industries. Top 50 firms selected by yield represented 18 of those industries.

50 Top Industrials stocks ranged in estimated yield from 4.54% to 18.11%. Top ten, GMLP, DLNG, GCTAF, IEP, USDP, SFL, HMLP, PCFBY, NAP, & TOO averaged 13.99% yield.

Top ten Industrials firms by broker target price upsides, SOX.TO, FTAI, MIC, SFL, GMLP, CVA, HMLP, USDP, EIF.TO, & TOO averaged 40% estimated price gains.

$5k invested in the lowest-priced five June top-yield Industrials stocks showed 45.96% more net gain than from $5k invested in all ten.  Small dogs dominated this industrials sector.

Actionable Conclusions (1-10): Analysts Calculated 21% To 150% Net Gains From Ten Top Industrials Dogs By June 2018

Five of ten top dividend-yielding Industrials dogs were verified as being among the top ten of thirty gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart above). So, this yield-based forecast for Industrials dogs, as graded by Wall St. wizards, was 50% accurate.

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

Teekay Offshore Partners (TOO) was projected to net $1,506.75, based on the median of target estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 169% more than the overall market.

Exchange Income (OTCPK:EIFZF) [EIF.TO] was projected to net $410.77, based on dividends plus a median target estimate from eleven brokers, less broker fees. The Beta number showed this estimate subject to volatility 93% less than the market as a whole.

USD Partners (USDP) was projected to net $390.62, based on dividends, plus mean target price estimates from four analysts, less broker fees. No Beta number was available for USDP.

Hoegh LNG Partners (HMLP) was projected to net $293.38, based on dividends, plus median target price estimates from nine analysts, less broker fees. No Beta number was available for HMLP.

Covanta Holding (CVA) was projected to net $259.76, based on a mean target price estimate from nine analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 31% less than the market as a whole

Golar LNG Partners (GMLP) was projected to net $255.43 based on dividends, plus target estimates from ten brokers, less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.

Ship Finance Intl (SFL) was projected to net $237.81, based on target price estimates from six analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 37% more than the market as a whole.

Macquarie Infrastructure (MIC) was projected to net $231.49, based on dividends, plus a median target price estimate from seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.

Fortress Transportation (FTAI) netted $210.87 based on mean target price estimates from eight analysts plus dividends, less broker fees. No Beta number was available for FTAI.

Stuart Olson (OTCPK:CUUHF) [SOX.TO] was projected to net $210.20, based on dividends, plus a mean target price estimate from seven analysts, less broker fees. No Beta number was available for SOX.TO.

The average net gain in dividend and price was estimated at 40.07% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 11% more than the market as a whole.

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 June Industrials Sector Dogs By Yield

Actionable Conclusion (11-21) Dog Metrics Identified 10 Top Dividend Industrials Stocks By Yield

Top ten Industrials Sector dogs selected 6/26/17 by yield represented 4 of 23 constituent industries. Top yielding Industrials stock, Teekay Offshore Partners (TOO) [1] was one of seven shipping & ports industry representatives. The others placed second through fifth, ninth, and tenth: Navios Maritime Midstream (NAP) [2]; Pacific Basin Shipping (OTCPK:PCFBY) [3]; Hoegh LNG Partners (HMLP) [4]; Ship Finance Intl (SFL) [5]; Dynagas LNG Partners (DLNG) [9]; Golar LNG Partners (GMLP) [10].

Sixth place went to the one railroad on the top ten list, USD Partners (USDP) [6]. Finally, the two remaining industrials, in seventh and eighth places, represented the conglomerate, and diversified industries, Icahn Enterprises (IEP) [7], and Siemens Gamesa Renewable Energy (OTCPK:GCTAF) [8], to complete the top ten May Industrials dogs list by yield.

Actionable Conclusion (22): Top Ten Industrials Dogs Showed 11.72% To 134.57% Upsides To June, 2018

To quantify top dog rankings, analyst median price target estimates gave us 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. Brokers Calculated (23) An 11.67% Median Target Price Upside And (24) A 20.63% Net Gain From 30 Industrials Upside Dogs Come June 2018

Industrials top thirty stocks were graphed below to show relative strengths by dividend and price as of June 26, 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 9% 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 10.75% in the coming year. Notice, price lower than dividend in the coming year forecasts no Dow-like overbought conditions for the Industrials 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 only occasionally 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.

Analysts Targets Calculated A 45.96% Advantage For 5 Highest Yield, Lowest Priced Industrials Sector Stocks To June 2018

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

As noted above, top ten Healthcare dogs selected 6/26/17 showing the highest dividend yields represented four of twenty-three industries constituting the sector.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield Industrials Dogs Delivering (25) 48.92% Vs. (26) 33.51% Net Gains by All Ten by June, 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 45.96% more gain than $5,000 invested as $.5k in all of those ten. The very lowest priced Industrials top yield dog, Teekay Offshore Partners (TOO), was projected to deliver the best net gain of 150.67%.

The five lowest-priced Industrials top yield dogs for June 26 were: Teekay Offshore Partners (TOO); Pacific Basin Shipping (PCSBY); Navios Maritime Midstream (NAP); USD Partners (USDP); Ship Finance Intl (SFL), with prices ranging from $2.43 to $12.80.

Five higher-priced Industrials dogs for May 19 were: Dynagas LNG Partners (DLNG); Hoegh LNG Partners (HMLP); Siemens Gamesa Renewable Energy (OTCPK:GCTAF); Golar LNG Partners (GMLP); Icahn Enterprises (IEP), whose prices ranged from $14.75 to $52.06.

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.

Ten of these top 50 Industrials pups by yield qualify as a valuable catches! Find them among the now 52 Dogs of the Week I found on The Dividend Dog Catcher premium site, or the forty-five Dogs of the Week II now available. Click here to subscribe or get more information.

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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 from: pinterest.com

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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 covers one or more microcap stocks. Please be aware of the risks associated with these stocks.