16 'Safer' U.S. Dividend MoPay Dogs Chase Crescent Point July Gains
- 16 of 51 Monthly Paying (MoPay) U.S. dividend stocks showed positive annual-returns, and free cash-flow yields greater than dividend yields 6/30/17. Those 16 were tagged "safer".
- Ten top MoPay stocks listed on US exchanges showed gains ranging from 6.23% to 32.3% net. CJREF, BTBIF, ENDTF, GAIN, SCM, SUNS, EPR, ORC, CPTA, & CPG averaged 15.8% net.
- Top 10 "safer"July MoPay annual yields ranged 8.14% to 17.04% from ARESF; GAIN; CJREF, SUNS; BTBIF; ENDTF; SCM; AGNC; CPTA; ORC. Their free cash flow yields ranged 8.62%-45.10%.
- "Safer" MoPay stocks also reported payout ratios, total annual returns, and dividend growth, as of 6/30/17 to bolster their dividend back-up. None were discarded in this most recent screening due to negative annual-returns.
- Analyst one year targets revealed that $5k invested in the lowest priced five of ten top "safe" dividend U.S. MoPay stocks projected 6.18% LESS gain than from $5K invested in all ten.
Actionable Conclusion (1-10): Analysts Allege Top U.S. Ten MoPay "Safer" Dog Stocks Could Net 6.2% to 32.3% Gains By July, 2018
Eight of the ten top "safe" dividend MoPay dogs (tinted gray in the chart above) based on analyst 1 year target prices, were verified as being among the Top ten gainers for the coming year. Thus the dog strategy for this group as graded by analyst estimates for July proved 80% accurate.
Ten probable profit generating trades illustrated by YCharts analytics for 2018 were:
Crescent Point Energy (CPG) netted $322.88 per estimates from eighteen analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 50% more than the market as a whole.
Capitala Finance (CPTA) netted $291.30 based on estimates from nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 2% less than the market as a whole.
Orchid Island Capital (ORC) netted $266.00 based on a target price from two analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 48% less than the market as a whole.
EPR Properties (EPR) netted $134.58 based on dividends plus a median target price estimate from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 44% less than the market as a whole.
Solar Senior Capital (SUNS) netted $133.52 based on mean target price estimates from five analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 60% less than the market as a whole.
Stellus Capital Investment (SCM) netted $129.50 based on target price estimates from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 44% less than the market as a whole
Gladstone Investment (GAIN) netted $93.62 based on dividends and the median price estimate from five analysts less broker fees. The Beta number showed this estimate subject to volatility 27% less than the market as a whole.
Canoe EIT Income Fund (OTCPK:ENDTF) netted $78.70, based on dividends alone, with broker fees subtracted. The Beta number showed this estimate subject to volatility 6% more than the market as a whole.
BTB REIT (OTC:BTBIF) netted $67.74 based on no target price estimates from analysts, just dividends less broker fees. The Beta number showed this estimate subject to volatility 8% less than the market as a whole.
Corus Entertainment (OTCPK:CJREF) netted $62.34 based on dividends with no price estimates from analysts less broker fees. The Beta number showed this estimate subject to volatility 36% less than the market as a whole.
Average net gain in dividend and price was 15.8% on $1k invested in each of these ten "Safer" U.S. MoPay dogs. This gain estimate was subject to average volatility 1o% less than the market as a whole.
The Dividend Dogs Rule
The "dog" moniker was earned by stocks 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 dividend yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best termed, "underdogs".
16 of 51 July All-Cap MoPay Dividend Dogs Showed Positive Returns And Cash Flow Yields Greater Than Their Dividend Yields
Periodic Safety Inspection
A previous article discussed the attributes of 50 all-cap MoPay stocks from which these 16 were sorted. You see below the list that passed the dividend "stress" test. These 16 all-cap monthly pay dividend dogs report positive returns and sufficient annual cash flow yield to cover their anticipated annual dividend yield. The margin of excess is shown in the bold face column labeled "SafeMargin".
Financial guarantees however are easily over-ruled by a board of directors managing company policy cancelling or varying the payout of dividends to shareholders. For example, Prospect Capital (PSEC) reduced its dividend from $.111 To $.083 as of January 2015. Also, American Capital Agency (AGNC) announced July 27 a reduction of its $.20 monthly shareholder payout to $.18 as of September. A more recent example is dividend reductions by Capitala Finance (CPTA) from $0.207 per month in December 2015 to $0.157 in January 2016 and a further reduction to $0.13 per month in October 2016. Having departed the list, Fifth Street Finance (FSC), trimmed its $0.06 monthly dividend per share to $0.02 as of March, 2017 and then descended to a $0.02 Quarterly dividend in June 2017. Allied firm, Fifth Street Senior Floating Rate Capital (FSFR) also departed the MoPay convention in March.
As Business Development Companies, Capitala and Fifth Street dividend payouts are tied to profits.
What Business Sectors Showed Up With "Safer" Equities Paying Monthly Dividends For June?
Just four of eleven Morningstar sectors were represented by the sixteen equities with "safer" June dividends. Those were from: real estate (7); financial services (5); consumer cyclical (1); energy (3); Basic Materials (0); Communication Services (0); Consumer Defensive (0); Healthcare (0); Industrials (0); Technology (0); Utilities (0).
The first three sectors named on the list above composed the top ten.
Dog Metrics Found No July Bargain MoPay "Safer" Dividend Stocks
Ten "Safe" top All-Cap U.S. MoPay dividend stocks per June 30 YCharts data ranked themselves by yield as follows:
Actionable Conclusions: (11) Analysts Estimated 5 Lowest Priced of Ten Monthly Pay Dividend Dogs To Deliver 11.35% VS. (12) 12.10% Net Gains from All Ten By July, 2018
$5000 invested as $1k in each of the five lowest priced stocks in the "safe" ten MoPay kennel by yield were determined by analyst 1 year targets to deliver 6.18% LESS net gain than $5,000 invested as $.5k in all ten. The seventh lowest priced "safer" MoPay dog, Capitala Finance (CPTA), was projected to deliver the best net gain of 29.13%.
Lowest priced five "safe" MoPay dividend dogs as of June 30 were: BTB REIT (OTC:BTBIF); Canoe EIT Income Fund (OTCPK:ENDTF); Gladstone Investment (GAIN); Orchid Island Capital (ORC); Artis REIT (ARESF), with prices ranging from $3.63 to $10.07.
Higher priced five "safe" all-cap MoPay dogs for June 30 were: Corus Entertainment (OTCPK:CJREF); Capitala Finance (CPTA); Stellus Capital Investment (SCM); Solar Senior Capital (SUNS); AGNC Investment (AGNC), whose prices ranged from $10.50 to $21.29.
This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The added scale of projected gains based on analyst targets contributed 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. Its also the work analysts got paid big bucks to do.
Caution is advised, however, as 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 net gain estimates mentioned 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.
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
Stocks listed above were suggested only as possible starting points for your safest MoPay dog dividend stock purchase research process. These were not recommendations.
Three of these monthly paying dividend pups qualify as valuable catches! Find them among the now 52 Dogs of the Week (DOTW)I plus 46 DOTWII found on The Dividend Dog Catcher premium site. Click here to subscribe or get more information.
Make investing fun again! Message me with your favorite dividend stock ticker. I will include it in my next FFave crowd-sourced article for July. Just send your ticker symbol of your favorite dividend stock by clicking on the envelope icon next to my name below the headline of this article, or simply leave a comment down below. Message me, and remember: Root for the Underdog.
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.ycharts. com; www.finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. "Safer" Dollar Dog photo from: liquidlearninggroup.com
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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Analyst’s Disclosure: I am/we are long FSC. 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.
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