Your 19 'Safer' U.S. Monthly Paid Dividend Stocks Of 98 For February

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Includes: AGNC, APLE, ARESF, BRG, BTBIF, CJREF, CPTA, GHIFF, HRZN, ORC, PMULF, PSEC, SCM, TAHO
by: Fredrik Arnold

Summary

19 of 98 Monthly Paying (MoPay) U.S. dividend stocks were tagged "safer" for showing positive annual returns, and free cash flow yields greater than their dividend yields as of 2/7/18.

MoPay stock broker-estimated gains ranged 4%-33.9% net from PMULF, GHIFF, ARESF, BTBIF, HRZN, CJREF, AGNC, ORC & SCM, averaging 12.24% net.

"Safer" MoPay stocks also reported payout ratios, total annual returns, dividend growth, and p/e ratios as of 2/7/18 to substantiate their dividend backing. Thirty-one were disqualified for negative annual-returns.

Top 10 'safer' dividend February MoPay yields ranged 6.12% to 18.08% from PMULF;  APLE; GHIFF; ARESF; BTBIF; HRZN; AGNC; SCM; CJREF; ORC. Their free cash flow yields ranged 7.81%-33.75%.

Analyst one-year targets revealed that $5k invested in the lowest priced five of ten top "safer" U.S. MoPay stocks projected 27.55% LESS gain than from $5K invested in all ten.

Actionable Conclusion (1-10): Analysts Assert Top Ten U.S. 'Safer' Dividend MoPay Stocks Could Net 4.12% to 33.9% Gains By February, 2019

All ten top-gain 'safe' dividend MoPay stocks (tinted gray in the chart above) were verified as being among the ten highest yielders for the coming year, based on analyst 1 year targets. Thus the yield-based picking strategy for this group, as graded by analyst estimates, proved 100% accurate (a rarity).

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 7, 2019 were:

Stellus Capital Investment (SCM) net 339.01 based on target price estimates from five analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 49% less than the market as a whole

Orchid Island Capital (ORC) netted $160.82 based on no target price from analysts, just projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 71% less than the market as a whole.

Apple Hospitality REIT (APLE) netted $150.62 based on dividends plus a median target price estimate from five analysts less broker fees. A Beta number was not available for APLE.

AGNC Investment (AGNC) netted $135.01 based on dividends and a median target price estimate from ten analysts less broker fees. The Beta number showed this estimate subject to volatility 1% opposite the market as a whole.

Corus Entertainment (OTCPK:CJREF) netted $119.30 based on dividends alone less broker fees. The Beta number showed this estimate subject to volatility 65% less than the market as a whole.

Horizon Tech Finance (HRZN) was said to net $95.28, based on on mean target price estimates from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.

BTB REIT (OTC:BTBIF) netted $73.94 based on dividends alone less broker fees. The Beta number showed this estimate subject to volatility 3% more than the market as a whole.

Artis REIT (OTCPK:ARESF) netted $60.80 based only on dividends less broker fees. The Beta number showed this estimate subject to volatility 5% less than the market as a whole.

Gamehost (OTCPK:GHIFF) projected a $48.07 net gain based on dividends less broker fees. The Beta number showed this estimate subject to volatility 27% less than the market as a whole.

Pure Multi-Family REIT (OTCQX:PMULF) netted $41.22 based on mean target price estimates from no analysts, just dividends less broker fees. The Beta number showed this estimate subject to volatility 21% less than the market as a whole.

Average net gain in dividend and price was 12.24% on $10k invested as $1k in each of these ten "Safer" U.S. MoPay dogs. This gain estimate was subject to average volatility 31% less than the market as a whole.

The Dividend Dogs Rule

The "dog" moniker was earned by stocks 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 dividend yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best termed, "underdogs".

19 of 98 January All-Cap US Exchange MoPay Dividend Stocks Showed Positive Returns And Cash Flow Yields Beyond Their Dividend Yields

Periodic Safety Inspection

A previousarticle discussed the attributes of the 98 all-cap MoPay stocks from which these 19 were sorted. You see below the list that passed the dividend "stress" test. These 19 all-cap monthly pay dividend dogs report positive returns and sufficient annual cash flow yield to cover their anticipated annual dividend yield. The margin of excess is shown in the bold face column labeled "SafeMargin".

Financial success, however, is easily manipulated by a board of directors managing company policy cancelling or varying the payout of dividends to shareholders. For example, Prospect Capital (PSEC) reduced its dividend from $.111 To $.083 as of January 2015. Also, American Capital Agency (AGNC) announced July 27, 2015 a reduction of its $.20 monthly shareholder payout to $.18 as of September.

Having departed the list, Fifth Street Finance (FSC), trimmed its $0.06 monthly dividend per share to $0.02 as of March, 2017 and then descended to a $0.02 Quarterly dividend in June 2017. Allied firm, Fifth Street Senior Floating Rate Capital (FSFR) also departed the MoPay convention in March. Also past listee, Blue Bluerock Residential (BRG) in December announced its retreat to quarterly dividend payments "in keeping with industry tradition." In August, September, October, November, December, and January Tahoe Resources (TAHO) skipped its monthly payouts.

One more recent example was the dividend reductions by Capitala Finance (CPTA) from $0.207 per month in December 2015 to $0.157 in January 2016, a further reduction to $0.13 per month in October 2016, and a cut to $.085 per month in October, 2017.

Five Business Sectors Showed "Safer" Equities Paying Monthly Dividends For February

Just five of eleven Morningstar sectors were represented by the nineteen equities with "safer" January dividends. Those were from: real estate (9); consumer cyclical (2); financial services (6); Utilities (1); energy (1); Basic Materials (0); Communication Services (0); Consumer Defensive (0); healthcare (0); Industrials (0); Technology (0).

The first three sectors named on the above list constituted the top ten by yield.

Yield Metrics Uncovered No Bargain MoPay "Safer" Stocks

Ten "Safe" top All-Cap U.S. MoPay dividend stocks per February 7 YCharts data ranked themselves by yield as follows:

Actionable Conclusions: Analysts Estimated 5 Lowest Priced of Ten Monthly Pay Dividend Dogs (11) To Deliver 8.87% VS. (12) 12.24% Net Gains from All Ten By February, 2019

$5000 invested as $1k in each of the five lowest priced stocks in the "safe" ten U.S. MoPay kennel by yield were determined by analyst 1 year targets to deliver 27.55% LESS net gain than $5,000 invested as $.5k in all ten. The eighth lowest priced "safer" MoPay dog, Stellus Capital Investment (SCM), was projected to deliver the best net gain of 33.9%.

Lowest priced five "safe" MoPay dividend dogs as of February 7 were: BTB REIT (OTC:BTBIF); Pure Multi-Family REIT (OTCQX:PMULF); Corus Entertainment (OTCPK:CJREF); Orchid Island Capital (ORC); Gamehost (OTCPK:GHIFF), with prices ranging from $3.62 to $8.22.

Higher priced five "safe" all-cap MoPay dogs for February 7 were: Artis REIT (OTCPK:ARESF); Horizon Tech Finance (HRZN); Stellus Capital Investment (SCM); Apple Hospitality REIT (APLE); AGNC Investment (AGNC), whose prices ranged from $10.86 to $18.58.

This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The added scale of projected gains based on analyst targets contributed 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. Its also the work analysts got paid big bucks to do.

Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.

The net gain estimates mentioned 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.

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

Stocks listed above were suggested only as possible starting points for your safest MoPay dog dividend stock purchase 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.ycharts. com; www.finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. "Safer" Laundry Dogs photo from: justonemorepet.wordpress.com.

Disclosure: I am/we are long GHIFF.

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.

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