6 S&P 500 Stocks Tagged For 20% To 49% November Net Gains Per Broker Targets

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Includes: AES, CTL, HCN, HCP, HP, IRM, KIM, KSS, M, NAVI, OKE, PM, SCG, SPG, STX, T, WMB
by: Fredrik Arnold

Summary

"The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization."

Broker target-estimated November top ten net gains ranged 12.05%-49.03% topped by CTL 11/29/17. The master list was pre-screened to include firms with net annual returns better than -30%.

50 Top S&P 500 index stocks ranged in estimated annual yield from 3.47% to 14.86%. Top ten, HCN, T, HCP, SCG, IRM, OKE, KIM, M, STX, & CTL averaged 6.71%.

S&P 500 index top ten firms by broker target price upsides, HCP, SCG, OKE, KIM, PM, SPG, AES, WMB, NAVI, & CTL averaged an 18.83% estimated increase.

$5k invested in the lowest-priced five November top-yield S&P 500 dividend dogs showed 26.37% more net-gain than from $5k invested in all ten.  Little low-price Dogs led, again.


Actionable Conclusions (1-10): Analysts Estimated 12% To 49% Net Gains For Ten S&P 500 Dogs To November 2018

Five of ten top S&P 500 dividend dogs by yield were verified as being among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart above). Thus, this yield-based forecast for S&P 500 dogs was graded by Wall St. Wizards as 50% accurate.

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

CenturyLink (CTL) was projected to net $490.32, based on dividends, plus a mean target price estimate from eighteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.

Navient (NAVI) was projected to net $253.58, based on a median target estimates from nine analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 135% more than the market as a whole.

Williams Companies (WMB) netted $228.94 based on a median target price estimate from nineteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 40% more than the market as a whole.

The AES Corporation (AES) was projected to net $222.22, based on dividends, plus a mean target price estimate from ten analysts, less broker fees. The Beta number showed this estimate subject to volatility 23% more than the market as a whole.

Simon Property Group (SPG) was projected to net $219.21, based on a median target price estimate from twenty analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 40% less than the market as a whole.

Philip Morris Intl. (PM) was projected to net $204.00, based on dividends, plus a mean target price estimate from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.

Kimco Realty (KIM) was projected to net $199.27, based on dividends, plus median target price estimates from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to volatility 36% less than the market as a whole.

ONEOK (OKE) was projected to net $177.30, based on a median target price estimate from eighteen analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 29% more than the market as a whole.

SCANA (SCG) was projected to net $172.27 based on dividends, plus a median target estimate from eleven brokers, less broker fees. The Beta number showed this estimate subject to volatility 17% more than the market as a whole.

HCP, Inc. (HCP) was projected to net $120.52, based on target price estimates from twenty-one analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 62% less than the market as a whole.

The average net gain in dividend and price was estimated at 28.59% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 2% less than the market as a whole.

Actionable Conclusion (11 & 12): (Bear Alert) Analysts Expected Two S&P 500 Stocks To Lose 6.8% & 11% By November, 2018

The probable losing trades revealed by Y-Charts for 2018 were:

Kohl's (KSS) projected a loss of $68.22 based on dividend and a median target price estimate from twenty-two analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 25% more than the market as a whole.

Helmerich & Payne (HP) projected a loss of $110.11 based on dividend and a median target price estimate from twenty-nine analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 33% more than the market as a whole.

Average net loss in dividend and price was 8.9% on $2k invested as $1k in each of these two "safer" dividend Aristocrats stocks. This loss estimate was subject to average volatility 10% 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 500 Dividend Stocks By Yield

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

Top ten S&P 500 stocks selected 11/29/17 by yield represented seven of eleven Morningstar sectors. Top yielding stock, CenturyLink (CTL) [1] was one of two communications services sector representatives in the top ten. The other representative placed ninth, AT&T, Inc. (T) [9].

In second place by yield, was the lone technology dog, Seagate Technology (STX) [2]. In third place Macy's (M) [3] was the only consumer cyclical representative firm in the top ten.

Three real estate sector representatives placed fourth, eighth, and tenth. They were Kimco Realty (KIM) [4], HCP, Inc. (HCP) [8], and Welltower (HCN) [10].

One energy sector representative placed fifth, ONEOK (OKE) [5], and a single industrials sector firm placed Sixth, Iron Mountain (IRM) [6].

Finally, a utilities representative placed seventh, SCANA (SCG) [7] to complete the S&P 500 top ten by yield for November.

Actionable Conclusions: (24-33) Top Ten S&P 500 Dogs Showed 8.55% To 38.2% Upsides To November, 2018; (34) The Worst Downside of Seven Was -13.92%.

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. Brokers Estimated (35) A 6.5% Median Target Upside And (36) A 10.14% Net Gain From 30 S&P 500 Stocks By November, 2018


Aristocrats top thirty stocks were graphed below to show relative strengths by dividend and price as of September 22, 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 was employed to estimate 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 6.5% 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 5.6% in the coming year. Notice, price intersecting and moving above dividend in the coming months portends a Dow-like oversold condition for S&P 500 top yield dogs by mid-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 was optimal for a valid projection estimate. Estimates provided by a single 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 Project A 26.37% Advantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To November 2018

Ten top S&P 500 dividend dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking. The master list was prescreened to include firms with net returns greater than -30%.

As noted above, top ten S&P 500 dividend dogs selected 11/29/17 showing the highest dividend yields represented seven of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Projected (37) 5 Lowest-Priced of the Top Ten Highest-Yield S&P 500 Dogs Delivering 19.13% Vs. (38) 15.14% 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 S&P 500 kennel by yield were predicted by analyst 1-year targets to deliver 26.37% more gain than $5,000 invested as $.5k in all of those ten. The very lowest priced S&P 500 top yield dog, CenturyLink (CTL), was projected to deliver the best net gain of 49.03%.


The five lowest-priced top yield S&P 500 dividend dogs for November 29 were: CenturyLink (CTL); Kimco Realty (KIM); Macy's (M); HCP, Inc. (HCP); AT&T, Inc. (T), with prices ranging from $14.54 to $36.48.

Five higher-priced S&P 500 dividend dogs for November 29 were: Seagate Technology (STX); Iron Mountain (IRM); SCANA (SCG); ONEOK (OKE); Welltower (HCN), whose prices ranged from $38.75 to $67.28.

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.

Three of these top S&P 500 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 now accumulating returns. A Dogs of the Week III (Safari to Sweet Success) portfolio launched September 8. 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&P500 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:finance.yahoo.com

Disclosure: I am/we are long PFE, T..

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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