Actionable Conclusions (1-10): Brokers Projected 6.39% To 62.14% Net Gains For Top Ten Utilities For November 2018
Six of ten top dividend-yielding Utilities 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, the yield-based forecast for Utilities as graded by Wall St. wizards was 60% accurate.
Ten probable profit-generating trades were revealed in YCharts for November, 2018:
Spark Energy (SPKE) was projected to net $621.39 based on dividends plus a mean target price estimate from four analysts,, less broker fees. The Beta number showed this estimate subject to volatility 170% opposite the market as a whole.
Snam S.p.A. (OTCPK:SNMRY) was projected to net $256.90, based on dividends, alone with no upside estimate from analysts, less broker fees. The Beta number showed this estimate subject to volatility 47% less than the market as a whole.
Pattern Energy Group (PEGI) was projected to net $233.43, based on dividends, plus median target price estimates from fifteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 4% more than the market as a whole.
SCANA (SCG) was projected to net $225.82, based on target price estimates from eleven analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 81% less than the market as a whole.
Power Assets Holdings (OTCPK:HGKGY) was projected to net $182.25, based on no target price estimates, just dividends, less broker fees. The Beta number showed this estimate subject to volatility 45% less than the market as a whole.
Suburban Propane Partners (SPH) was projected to net $175.34, based on dividends, plus a mean target price estimate from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.
Endesa (OTCPK:ELEZF) netted $117.76 based on just dividends, less broker fees. The Beta number showed this estimate subject to volatility 7% opposed to the market as a whole.
AmeriGas Partners (APU) was projected to net $96.29, based on a median target price estimate from nine analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 70% less than the market as a whole.
Cia de Transmissao de Energia (OTCPK:CTPZY) was projected to net $92.20, based on no estimates from analysts, just dividends, less broker fees. The Beta number showed this estimate subject to volatility 54% less than the market as a whole.
Brookfield Renewable (BEP) was projected to net $63.68, based on a median target price estimate from fifteen analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 79% less than the market as a whole.
The average net gain in dividend and price was estimated at 20.65% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 78% 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 November Utilities Sector Stocks By Yield
Actionable Conclusions (11-20) Ten Top Dividend Utilities Stocks Ranked By Yield
Top ten Utilities Sector dogs selected 11/24/17 by yield represented four of five constituent industries. Top yielding stock, was was Snam S.p.A. (OTCPK:SNMRY), the tops of three regulated gas industry representatives in the top ten. The other two placed sixth, and eighth: Suburban Propane Partners (SPH) , and AmeriGas Partners (APU) .
In third place was the first of three regulated electric utility industry firms in the top ten, Endesa (OTCPK:ELEZF) . The others placed fourth and seventh, Cia de Transmissao de Energia (OTCPK:CTPZY) , and Rio Paranapanema Energia (OTCPK:DEIPY) .
Second, fifth, and ninth top utilities by yield were the three Independent utility industry representatives, Power Assets Holdings (OTCPK:HGKGY)  and (OTCPK:HGKGF) . The other was, Companhia Energética de São Paulo (CEQSY) .
Finally, one diversified firm made the top ten Utilities by yield in tenth place, Centrica plc (OTCPK:CPYYY) . This completed the top ten November Utilities by yield.
Actionable Conclusions: (21) Top Six Utilities Dogs Showed 2.85% To 58.20% Upsides To November, 2018; (22) Three Showed Downsides.
To quantify top stock rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst mean price target estimates provide another tool to dig out bargains.
Actionable Conclusions: Wall St. Analysts Estimated (23) A 3.5% Median Target Price Upside and (24) A 11.05% Net Gain From 30 Utilities For November, 2018
Utilities top thirty stocks were graphed below to show relative strengths by dividend and price as of November 24, 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 2% 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 4.2% in the coming year. Notice, price $600 lower than dividend in the coming year forecasts no Dow-like oversold conditions for the Utilities top yield dogs in 2018.
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 were found to make the most 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 Calculated A 23.32% Disadvantage For 5 Highest Yield, Lowest Priced Utilities Sector Stocks To November 2018
Ten top Utilities dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.
As noted above, top ten Utilities dogs selected 11/24/17 showing the highest dividend yields represented four of five industries constituting the sector.
Actionable Conclusions: Analysts Projected (25) 5 Lowest-Priced of the Top Ten Highest-Yield Utilities Dogs Delivering 9.18% Vs. (26) 11.98% Net Gains by All Ten by November, 2018
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Utilities kennel by yield were predicted by analyst 1-year targets to deliver 23.32% LESS gain than $5,000 invested as $.5k in all of those ten. The sixth lowest priced Utilities top yield stock, Snam S.p.A. (OTCPK:SNMRY), was projected to deliver the best net gain of 25.69%.
The five lowest-priced Utilities top yield stocks for November 24 were: Companhia Energética de São Paulo (OTCPK:CSQSY), Centrica (OTCPK:CPYYY), Power Assets Holdings (OTCPK:HGKGY) & (OTCPK:HGKGF), and Rio Paranapanema Energia (OTCPK:DEIPY), with prices ranging from $3.48 to $8.97.
Five higher-priced Utilities for November 24 were: Snam S.p.A. (OTCPK:SNMRY), Endesa (OTCPK:ELEZF), Cia de Transmissao de Energia (OTCPK:CTPZY), Suburban Propane Partners (SPH), and AmeriGas Partners (APU), whose prices ranged from $10.06 to $45.06.
The distinction between five low-priced dividend stocks 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 Utilities 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 52 Dogs of the Week II that are 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.
Make investing fun again. See your underdog in print!
Suggest a favorite stock for my next follower favorite article. Message me with your favorite stock ticker. I will include it in that next article.
Just send the ticker symbol for your favorite dividend stock (or two) by clicking on the envelope icon below the headline of this article, or simply type a comment in the comments sector below. Type your top ticker, and remember: Root for the Underdog.
Stocks listed above were suggested only as possible reference points for your Utilities 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: moneysense.ca
Disclosure: I am/we are long CAFD. 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.