S&P MidCap 400 Dividend Dogs Are Led By Real Estate Gains In July

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Includes: AEO, CXW, GEO, GME, HPT, LHO, MCY, MPW, NNN, OHI, SKT, SNH, UNIT, WPG, WRI
by: Fredrik Arnold

Summary

"The S&P MidCap 400 provides investors with a benchmark for mid-sized companies, reflecting the distinctive  risk and return characteristics of this market segment."

Broker target-estimated July top ten net gains ranged 17.1%-43.7% topped by CXW as of 7/10/17. The master list was screened to exclude firms with net returns under -6%.

50 Top S&P MidCap 400 index stocks ranged in yield 3.22%-12.1%. Top ten, LHO, CXW, LHO, GEO, HPT, GME, MPW, OHI, UNIT, & WPG, averaged 7.9% yield.

S&P MidCap 400 index top ten firms by broker target price upsides, CMP, GME, AEO, HPT, WRI, GEO, NNN, UNIT, SKT, & CXW averaged 22.25% estimated price advances.

$5k invested in the lowest-priced five July top-yield S&P MidCap 400 dividend dog stocks showed 1.09% more net-gain than from $5k invested in all ten.  Small dogs led the July S&P MidCap 400 top ten.

Actionable Conclusions (1-10): Wall St. Wizards Predicted 17.1% To 43.7% Net Gains For Ten S&P MidCap 400 Dogs For July 2018

Six of ten top yield S&P MidCap 400 dividend dogs were verified as being among the top ten of thirty gainers for the coming year based on analyst 1-year target prices. (They're tinted gray in the chart above.) Thus, this yield-based forecast for S&P MidCap 400 dogs was graded by Wall St. wizards as 60% accurate.

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

CoreCivic (CXW) was projected to net $436.90, based on target price estimates from four analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 7% less than the market as a whole.

Uniti Group (UNIT) was projected to net $400.31, based on dividends, plus a mean target price estimate from seven analysts, less broker fees. A Beta number was not available for UNIT.

Tanger Factory Outlet (SKT) was projected to net $377.44, based on a median target estimates from ten analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 55% less than the market as a whole.

The GEO Group (GEO) was projected to net $250.85, based on a median target price estimate from five analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 54% more than the market as a whole.

National Retail Properties (NNN) was projected to net $247.69, based on a median target price estimate from fifteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 61% less than the market as a whole.

Hospitality Properties Trust (HPT) netted $202.73 based on a median target price estimate from eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 1% more than the market as a whole.

Weingarten Realty (WRI) was projected to net $199.71, based on dividends, plus a mean target price estimate from eleven analysts, less broker fees. The Beta number showed this estimate subject to volatility 29% less than the market as a whole.

GameStop (GME) was projected to net $192.06, based on dividends, plus median target price estimates from fifteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.

Medical Properties Trust (MPW) was projected to net $188.13 based on dividends, plus a median target estimate from fifteen brokers, less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.

American Eagle Outfitters (AEO) was projected to net $171.11, based on dividends, plus a mean target price estimate from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 9% more than the market as a whole.

The average net gain in dividend and price was estimated at 26.67% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 18% under the market as a whole.

Actionable Conclusion (11): (Bear Alert) Brokers Projected One S&P MidCap 400 Dog To Make A 5.99% Loss By July 2018

The probable losing trade revealed by YCharts for 2018 was:

The Mercury General (MCY) projected a loss of $59.90 based on dividend and a median target price estimate from two analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 52% less 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".

50 Top S&P MidCap 400 Dividend Dogs By Yield

Actionable Conclusions (14-23): 10 Top S&P 500 Dividend Stocks By Yield

Top ten S&P MidCap 400 stocks selected 7/10/17 by yield represented two of eleven Morningstar sectors. Top yielding stock, Washington Prime Group (WPG) [1] was the one of nine real estate sector representatives in the top ten.

The other real estate representatives placed second through fifth, and seventh to tenth: Uniti Group (UNIT) [2]; Senior Housing Properties (SNH) [3]; Omega Healthcare (OHI) [4]; Medical Properties Trust (MPW) [5]; Hospitality Propeties Trust (HPT) [7]; The GEO Group [GEO] [8]; CoreCivic (CXW) [9]; LaSalle Hotel Properties (LHO) [10].

One consumer cyclical sector firm placed sixth by yield, GameStop (GME) [6], to complete the S&P MidCap 400 top ten for July.

Actionable Conclusions: (24) Top Ten S&P MidCap 400 Dogs Showed 13.55% To 39.47% Upsides To July 2018; (25) Downside From One Loser Was -8.63%.

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. Analysts Calculated (26) A 13.27% Median Target Price Upside And (27) A 16.02% Net Gain From 20 S&P MidCap 400 Upside Dogs Come July 2018

S&P MidCap 400 top twenty stocks were graphed below to show relative strengths by dividend and price as of July 10, 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 10.8% 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 12% in the coming year.

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.

Analysts Forecast A 1.09% Advantage For 5 Highest Yield, Lowest Priced S&P MidCap 400 Dividend Stocks To July 2018

Ten top S&P 400 MidCap dividend dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.

As noted above, top ten S&P MidCap 400 dividend dogs selected 7/10/17 showing the highest dividend yields represented two of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Projected (28) 5 Lowest-Priced of the Top Ten Highest-Yield S&P MidCap 400s Delivering 20.47% Vs. (29) 20.25% Net Gains by All Ten by July 2018

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend S&P MidCap 400 kennel by yield were predicted by analyst 1-year targets to deliver 1.09% more gain than $5,000 invested as $.5k in all of those ten. The sixth lowest priced S&P MidCap 400 top yield dog, CoreCivic (CXW), was projected to deliver the best net gain of 43.69%.

The five lowest-priced top yield S&P MidCap 400 dividend dogs for July 10 were: Washington Prime Group (WPG); Medical Properties Trust (MPW); Senior Housing Properties (SNH); GameStop GME); Uniti Group (UNIT), with prices ranging from $8.27 to $24.22.

Five higher-priced S&P MidCap 400 dividend dogs for July 10 were: CoreCivic (CXW); Hospitality Properties Trust (HPT); The GEO Group (GEO); LaSalle Hotel Properties (LHO); Omega Healthcare (OHI), whose prices ranged from $27.03 to $32.20.

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.

Two or more of these top S&P MidCap 400 pups by yield qualify as valuable catches! Find them among the now 52 Dogs of the Week I found on The Dividend Dog Catcher premium site, or the forty-eight Dogs of the Week II now available. Click here to subscribe or get more information.

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Stocks listed above were suggested only as possible reference points for your S&P MidCap 400 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: cnn.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.

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