Actionable Conclusions (1-10): Analysts Estimated 17.4% To 48% Net Gains For Top Ten Real Estate Stocks For November 2018
Six of ten top dividend-yielding Real Estate stocks were verified as being among the top ten gainers for the coming year based on analyst 1-year target prices. (They're tinted gray in the chart above). So, this yield-based forecast for the Real Estate sector dogs was 60% accurate.
Ten probable profit-generating trades were revealed in YCharts for November, 2018:
Uniti Group (UNIT) was projected to net $480.62, based on dividends, plus a median target price estimate from eleven analysts, less broker fees. The Beta number showed this estimate subject to volatility 352% opposite the market as a whole.
DDR Corp (DDR) made the list with a projected net gain of $369.45, based on the median target price estimate from twnty analysts, plus their estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 24% less than the market as a whole.
Sabra Health Care REIT (SBRA) was projected to net $309.54, based on dividends, plus mean target price estimates from twelve analysts, less broker fees. The Beta number showed this estimate subject to volatility 7% less than the market as a whole.
New Senior Investment Group (SNR) netted $259.70 based on mean target price estimates from three analysts plus dividends, less broker fees. No Beta number was available for SNR.
CBL & Associates (CBL) was projected to net $245.38, based on a median target estimate from sixteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 24% more than the market as a whole.
Washington Prime Group (WPG) was projected to net 242.14, based on dividends plus a median target estimate from three brokers, less broker fees. The Beta number showed this estimate subject to volatility 5% less than the market as a whole.
Bluerock Residential (BRG) was projected to net $211.30, based on target price estimates from seven analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.
New Residential Investment (NRZ) was projected to net $196.53 based on dividends, plus target estimates from three brokers, less broker fees. The Beta number showed this estimate's volatility 38% less than the market as a whole.
Ladder Capital (LADR) netted $175.98 based on mean target price estimates from six analysts plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 7% more than the market as a whole.
Two Harbors Investment (TWO) was projected to net $174.09, based on dividends, plus median target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.
The average net gain in dividend and price was estimated at 26.65% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 63% 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".
Top 50 October Real Estate Sector Stocks By Yield
Actionable Conclusions (11-20) Yield Metrics Ranked 10 Top Dividend Real Estate Stocks
Top ten Real Estate Sector dogs selected 11/24/17 by yield represented four of nine constituent industries. Top yielding stock, Orchid Island Capital (ORC)  was the tops of four diversified REIT industry representatives.
The lone industrial REIT leader placed second, Uniti Group (UNIT) .
Finally, three of the top ten were residential REIT representatives that found themselves in sixth, through eighth places: Two Harbors Investment (TWO) ; New York Mortgage Trust (NYMT) ; Ellington Residential (EARN) , to complete the top ten November Real Estate dogs by yield.
Actionable Conclusions: (21) Top Ten Real Estate Dogs Showed 8.4% To 35.3% Upsides To November, 2018; (22) Downsides From Lowest Eight Were -0.67% To -5.72%.
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 Estimated (23) A 5.9% Median Target Price Upside and (24) 15.5% Net Gain From 30 Real Estate Upside Dogs To November, 2018
Real Estate top thirty stocks were graphed below to show relative strengths by dividend and price as of October 18, 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.
Analysts' median 1-year targets reported by YCharts projected a 5% 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 6% in the coming year. Notice, price $900 lower than dividend in the coming year indicates no Dow-like overbought conditions for 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 have proved best for more accurate projection estimates. 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 Predicted A 11.76% Disadvantage For 5 Highest Yield, Lowest Priced Real Estate Sector Stocks To October, 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 11/24/17 showing the highest dividend yields represented four of nine industries constituting the sector.
Actionable Conclusions: Analysts Projected (25) 5 Lowest-Priced of the Top Ten Highest-Yield Real Estate Dogs Delivering 17.29% Vs. (26) 19.6% Net Gains by All Ten, Come November 2018
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Real Estate kennel by yield were predicted by analyst 1-year targets to deliver 11.76% LESS gain than $5,000 invested as $.5k in all ten. The tenth lowest priced Real Estate top yield dog, Uniti Group (UNIT), was projected to deliver the best net gain of 48.06%.
The five lowest-priced Real Estate top yield dogs as of November 24 were: CBL & Associates (CBL); New York Mortgage Trust (NYMT); Washington Prime Group (WPG); New Senior Investment Group (SNR); CYS Investments (CYS), with prices ranging from $5.69 to $8.25.
Five higher-priced Real Estate dogs as of November 24 were: Orchid Island Capital (ORC); Western Asset Mortgage (WMC); Ellington Residential (EARN); Two Harbors Investment (TWO); Uniti Group (UNIT), whose prices ranged from $9.89 to $16.26.
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, 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.
Two of these top 50 Real Estate pups by yield qualified as Wheeler Real Estate IT catches! Find them among the now 52 Dogs of the Week I found on The Dividend Dog Catcher premium site, or the fifty-two Dogs of the Week II now accumulating returns. Also, a Safari to Success (Dogs of the Week III) launched in early September. 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. Outdoor city dog photo: littlegatepublishng.com
Disclosure: I am/we are long APTS.
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.