S&P 500 Top Net Gainers: Iron, HCP, Welltower, Simon, And Ford, By February Broker Bets

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Includes: CTL, F, HCP, IRM, LB, MAA, O, OKE, PM, PPL, SO, SPG, T, VTR, WELL, 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 January/February top ten net gains ranged 14.1%-25.5% topped by IRM 2/2/18. The master list was pre-screened to include firms with net annual returns better than -15%.

50 Top S&P 500 index stocks ranged in estimated annual yield from 3.52% to 6.98%. Top ten, PPL, O, SO, T, OKE, F, VTR, HCN, HCP, & IRM averaged 5.66%.

S&P 500 index top ten firms by broker target price upsides, VTR, WMB, F, MAA, LB, PM, HCN, HCP, SPG, & IRM averaged 17.23% estimated price increases.

$5k invested in the lowest-priced five January/February top-yield S&P 500 dividend dogs showed 8.83% more net-gain than from $5k invested in all ten.  Little low-price stocks prevailed.

Actionable Conclusions (1-10): Analysts Estimated 14% To 25.5% Net Gains For Ten S&P 500 Dogs To February 2019

Five of ten top S&P 500 dividend dogs by yield were 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.

Projections based on estimated dividend returns from $1000 invested in the thirty highest yielding stocks and their aggregate one year analyst median target prices, as reported by YCharts, created the 2018-19 data points. Note: one year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to February 2, 2019 were:

Iron Mountain (IRM) was projected to net $255.10, based on dividends, plus a mean target price estimate from seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.

HCP, Inc. (HCP) was projected to net $219.73, based on target price estimates from twenty-on analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 73% less than the market as a whole.

Welltower (HCN) was projected to net $216.61, based on a median target estimates from twenty-three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 83% less than the market as a whole.

Simon Property Group (SPG) was projected to net $211.15, based on dividends, plus a mean target price estimate from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to volatility 46% less than the market as a whole.

Ford Motor (F) was projected to net $203.16, based on a median target price estimate from twenty-four analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 14% more than the market as a whole.

L Brands (LB) was projected to net $196.69, based on a median target price estimate from twenty-nine 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 $195.00, based on dividends, plus a mean target price estimate from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 15% less than the market as a whole.

Mid-America Apartment (MAA) was projected to net $188.31, based on dividends, plus median target price estimates from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 72% less than the market as a whole.

Ventas (VTR) was projected to net $186.70 based on dividends, plus a median target estimate from twenty-one brokers, less transaction fees. The Beta number showed this estimate subject to volatility 99% less than the market as a whole.

Williams Companies (WMB) netted $175.44 based on a median target price estimate from twenty analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 32% more than the market as a whole.

The average net gain in dividend and price was estimated at 25.62% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 40% 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 (11-20): 10 Top S&P 500 Dividend Stocks By Yield

Top ten S&P 500 stocks selected 2/2/18 by yield represented six of eleven Morningstar sectors. Top yielding stock, was the lone industrials representative, Iron Mountain (IRM) [1].

Second place was claimed by the first of four real estate sector representatives, HCP, Inc. (HCP) [2]. The others placed placed third, fourth, and ninth. They were, Welltower (HCN) [3], Ventas (VTR) [4], and Realty Income (O) [9].

In fifth place Ford Motor (F) [6] was the lone consumer cyclical representative firm in the top ten, while one energy sector representative placed sixth, ONEOK (OKE) [6], and one communication services representative took seventh, AT&T (T) [7].

Finally, Two utilities representatives placed eighth, and tenth, Southern (SO) [8], and PPL Corporation (PPL) [10], to complete the S&P 500 top ten by yield for January/February.

Actionable Conclusions: (21-30) Top Ten S&P 500 Dogs Showed 14.85% To 20.53% Upsides To February, 2019; (31) The Lowest of Thirty Was 0.25%.

To quantify top dog 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 became another tool to dig out bargains.

Analysts Project A 8.83% Advantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To February 2019

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 only include firms with net returns greater than -15%.

As noted above, top ten S&P 500 dividend dogs selected 2/2/18 showing the highest dividend yields represented six of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Projected 5 Lowest-Priced of the Top Ten Highest-Yield S&P 500 Dogs (31) Delivering 19.03% Vs. (32) 17.49% Net Gains by All Ten by February, 2019

$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 8.83% 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 27.86%.

The five lowest-priced top yield S&P 500 dividend dogs for February 2 were: Ford Motor (F); HCP, Inc. (HCP); PPL Corporation (PPL); Iron Mountain (IRM); AT&T, Inc. (T), with prices ranging from $10.71 to $38.07.

Five higher-priced S&P 500 dividend dogs for February 2 were: Southern (SO); Realty Income (O); Ventas (VTR); ONEOK (OKE); Welltower (HCN), whose prices ranged from $44.17 to $58.45.

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.

Stocks listed above were suggested only as possible reference points for your S&P500 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: youtube.com.

Disclosure: I am/we are long 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.