Actionable Conclusion (1-10): Analysts Projected 15.8% To 99% Net Gains For Ten Basic Materials Dogs By September 2018
Seven of ten top yielding Basic Materials dogs (tinted in the chart above) were verified as being among the top ten net gainers for the coming year based on analyst 1-year target prices. Thus, the yield-based forecast for the Basic Materials dogs as graded by Wall St. wizards was 70% accurate.
Ten probable profit-generating trades were revealed in YCharts for September 2018:
Sibanye Gold (SBGL) was projected to net $990.18, based on target price estimates from three analysts, plus projected annual dividend, less broker fees. The Beta number was showed this estimate subject to volatility 10% opposed to the market as a whole.
CNX Coal Resources (CNXC) was projected to net $480.00, based on target price estimates from six analysts, plus projected annual dividend, less broker fees. No Beta number was available for CNXC.
Alliance Resource (ARLP) was projected to net $430.26, based on dividends, plus median target price estimates from six analysts, less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.
SunCoke Energy Partners (SXCP) was projected to net $360.52, based on dividends, plus mean target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to volatility 31% more than the market as a whole.
Ciner Resources (CINR) netted $355.28 based on dividends, plus mean target price estimates by three analysts, less broker fees. The Beta number showed this estimate subject to volatility 3% less than the market as a whole.
Natural Resources (NRP) was projected to net $266.85, based on dividends plus the median of four analyst estimates, less broker fees. The Beta number showed this estimate subject to volatility 36% less than the market as a whole.
Foresight Energy (FELP) was projected to net $235.08, based on dividends, plus mean target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to volatility 21% less than the market as a whole.
Indo Tambangraya (OTCPK:ITAYY) was projected to net $229.98, based on dividends alone, less broker fees. The Beta number showed this estimate subject to volatility 177% opposite the market as a whole.
Synthos (OTCPK:SYNYY) was projected to net $165.75, based on dividends only, no target price estimates, less broker fees. The Beta number showed this estimate subject to volatility 27% less than the market as a whole.
China Shenhua Energy Co (OTCPK:CSUAY) was projected to net $158.77, based on dividends only, with no target price estimates from analysts, less broker fees. The Beta number showed this estimate subject to volatility 22% less than the market as a whole.
Average net gain in dividend and price
was estimated at 36.73% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 69% less than the market as a whole.
Top 30 Basic Materials Dogs By Yield Covered 11 Industries In July/August
Yield (dividend / price) results from YCharts September 6 verified by YahooFinance for thirty stocks from eleven of thirteen Basic Materials Industries revealed the actionable conclusions in this article.
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 September Basic Materials Equities By Yield
Actionable Conclusion (11-20) Dividend Dog Metrics Selected 10 Top Basic Materials Stocks By Yield
Top ten Basic Materials dogs selected 9/6/17 showing top yields represented just four of thirteen industries constituting the sector: (1) coal [6 listed]; (2) chemicals [1 listed]; (3) steel [1 listed]; (4) industrial metals & minerals [2 listed].
Tops by yield was was the first of six coal industry representatives listed, Indo Tambangraya (OTCPK:ITAYY) . The remaining five coal dogs placed third, and fifth through eighth: China Shenhua Energy Co (OTCPK:CSUAY) ; SunCoke Energy Partners (SXCP) ; CNX Coal Resources (CNXC) ; Alliance Holdings (AHGP) ; Alliance Resource (ARLP) .
Finally, two industrial metals and minerals firm claimed the tail of the list in ninth and tenth places, Ciner Resources (CINR) , and Mount Gibson Iron (OTCPK:MTGRY)  to complete the top ten Septmber Basic Materials top dogs by yield.
Actionable Conclusions: (21-30) Nine Basic Materials Dogs Showed 4.38% To 93.98% Upsides, While (31) None Projected Losses By September, 2018
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 Expected (32) An 8.97% Median Target Price Upside And (33) A 17% Gain From 30 Basic Materials Upside Dogs Come September 2018
Basic Materials top thirty stocks were graphed below to show relative strengths by dividend and price as of September 6, 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 an 6.4% 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 7.5% in the coming year. Notice, price lower than dividend in the coming year forecasts no immediate overbought condition overtaking the Basic Materials 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 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 37.56% Disadvantage For 5 Highest Yield, Lowest Priced Basic Materials Stocks To September 2018
Ten top Basic Materials dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.
As noted above, top ten Basic Materials dogs selected 9/6/17 showing the highest dividend yields represented four industries in the basic materials sector.
Actionable Conclusions: Analysts Predicted (34) 5 Lowest-Priced of the Top Ten Highest-Yield Basic Materials Dogs Delivering 15.73% Vs. (35) 25.19% Net Gains by All Ten by September, 2018
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Basic Materials kennel by yield were predicted by analyst 1-year targets to deliver 37.56% LESS net gain than $5,000 invested as $.5k in each of those ten. The sixth lowest priced Basic Materials top yield ten dog, CNX Coal Resources (CNXC), was projected to deliver the best net gain of 48%.
The five lowest-priced Basic Materials top yield dogs for September 6 were: Indo Tambangraya (OTCPK:ITAYY); Mount Gibson Iron (OTCPK:MTGRY); Acerinox (OTCPK:ANIOY); China Shenhua Energy Co (OTCPK:CSUAY); Synthos (OTCPK:SYNYY), with prices ranging from $2.75 to $14.38.
Five higher-priced Basic Materials dogs for September 6 were:CNX Coal Resources (CNXC); SunCoke Energy Partners (SXCP); Alliance Resource (ARLP); Ciner Resources (CINR); Alliance Holdings (AHGP), whose prices ranged from $15.10 to $27.40.
That distinction between the 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, this glossary instablog to interpret my abbreviated headings, 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.
Three of these top 30 basic material 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 52 Dogs of the Week II now accumulating. This weekend, a Dogs of the Week III (DC Safari) portfolio launches after September 8. 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 or YCharts. Dog photo: pittsburghpetsitter.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 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.