- Ten 'safer' dividend Communication Services (CS) stock averaged 21.9% gains . Top gainer China Mobile produced a 41.26% net per broker targets 4/11/18.
- 32 of 74 top yield CS stocks were tagged "safer" because they showed positive annual-returns, and free cash-flow yields greater than their dividend yields.
- Top 10 "safer" dividend CS annual yields ranged 4.91% to 8.95% from TLTZF; SCMWY; MYTAY; TLTZY; PHI; BCE; VODPF; VOD; TEO; MBT. Their free cash flow yields ranged 5.25%-12.09%.
- 'Safer' dividend CS dogs also reported payout-ratios (lower is better), total annual-returns, dividend-growth, and p/e ratios as of 4/11/18 to verify cash reserves. The 74 list was narrowed to 60 by disqualifying stocks showing negative annual returns.
- Analyst one-year targets revealed that $5k invested in the lowest priced five of ten top 'safer' dividend CS stocks projected 25.77% LESS gain than that from $5K invested in all ten. The high price big stocks are back on top here.
Actionable Conclusions (1-10): Analysts Estimate Top Ten Communications Services 'Safer' Dividend Stocks To Net 3.32% to 41.23% Net Gains By April, 2019
Six of ten top-yield "safer" dividend communication services dogs (tinted gray in the chart above) were among the top ten gainers for the coming year based on analyst 1 year target prices as of 4/11/18. Thus, the yield strategy for this group, as graded by analyst estimates for this month, proved 60% 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 April, 2019 were:
China Mobile (CHL) netted $412.26 based on median target price estimates from three analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 46% less than the market as a whole.
Orange (ORAN) netted $374.39 based on median target price estimates from two analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 34% less than the market as a whole.
China Telecom Corp (CHA) netted $313.59 based on based on median target estimates from 3 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 24% less than the market as a whole.
Vodafone Group (VOD) netted $280.80 based on median target estimates from 3 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 48% more than the market as a whole.
Mobile Telesystems (MBT) was projected to net $252.54 based on median target estimates from 17 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 7% more than the market as a whole.
BCE. Inc. (BCE) netted $200.99 based on median target estimates from 22 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 67% less than the market as a whole.
Rogers Communications (RCI) netted $174.81, based on median target estimates from 21 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 16% less than the market as a whole.
Telecom Argentina (TEO) netted $108.61 based on median target estimates from 10 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 15% more than the market as a whole.
Vodafone Group (OTCPK:VODPF) netted $41.24 based on dividends, less broker fees. The Beta number showed this estimate subject to volatility 48% less than the market as a whole.
PLDT (PHI) netted $43.64 based on dividends alone, less broker fees. The Beta number showed this estimate subject to volatility 67% less than the market as a whole.
Average net gain in dividend and price was 21.9% on $10k invested as $1k in each of these ten “safer” dividend Communication Services stocks. This gain estimate was subject to average volatility 19% 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 yielding stocks in any collection became known as "dogs." More specifically, these are, in fact, best called, "underdogs."
April's "Safer" Dividend Communication Services Stocks
Yield (dividend / price) results from here April 11 supplemented by 1 year total returns (Annual) verified by YCharts for thirty-two of seventy four stocks from the Communication Services sector revealed the actionable conclusions discussed here.
32 "Safer" Dividend Communication Services Equities
The Communication Services sector includes just two industry groups. Telecom Services is huge, and Pay TV is tiny. None of the stocks of the 30 selected by returns and/or yield for this writing were PayTV.
Communication Services Firms With "Safer" Dividends
Periodic Safety Inspection
A previous article discussed the attributes of the 50 Top yield Communication Services stocks culled from this master list of 74. Below is the list of 32 resulting from the "safety" check noting positive annual returns and free annual cash flow yield sufficient to cover their estimated annual dividend yield.
Corporate financial priorities, however, are easily manipulated by any board of directors choosing to promote company policies canceling or varying the payout of dividends to shareholders. Another favorite ploy enjoyed by corporate strategists is the "variable" dividend whereby the dividend floats with corporate cashflow and is thus unpredictable. This article contends that adequate cash flow is strong justification for a company to sustain annual dividend increases.
Four additional columns of financial data, listed after the Safety Margin figures above, reveal payout ratios (lower is better), total annual returns, dividend growth, and p/e ratio levels for each stock. This data is provided to show additional methods to reach beyond yield to select reliable payout stocks. Positive results in all five columns after the dividend ratio is a remarkable financial accomplishment.
To quantify top stock rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high yield "dog" metric, analyst mean price target estimates were another tool to dig out bargains.
Yield Metrics Discovered Negative Returns From Lowest Priced "Safer" Communication Services Stocks
Ten "Safer" Communication Services firms with the biggest yields April 11, per YCharts data, ranked themselves by yield as follows:
Actionable Conclusions: Analysts Projected 5 Lowest Priced, of Ten "Safer" High Yield Communication Services Dogs, To (11) Deliver 7.72% VS. (12) 10.39% Net Gains from All Ten by April, 2019
$5000 invested as $1k in each of the five lowest priced stocks in the "safer" ten communications service pack by yield were determined by analyst 1 year targets to deliver 25.77% LESS net gain than $5,000 invested as $.5k in all ten. The seventh lowest priced "safer" communication services stock, Vodafone Group (NASDAQ:VOD) showed the best net gain of 28.08% per analyst targets.
Lowest priced five "safer" dividend communication services stocks as of April 11 were: Vodafone Group (OTCPK:VODPF); Tele2 (OTCPK:TLTZY); Magyar Telekom (OTCPK:MYTAY); Mobile Telesystems (MBT); Tele2 (OTCPK:TLTZF), with prices ranging from $2.95 to $12.00.
Higher priced five "Safer" Dividend Communication Services stocks as of April 11 were: PLDT (PHI); Vodafone Group (VOD); Telecom Argentina (TEO); BCE, Inc. (BCE); Swisscom (OTCPK:SCMWY), with prices ranging from $28.24 to $46.97.
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 "safer" dividend "Safer" Dividend Communication Services dog stock 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. Dog photo from: dogguardbiz.com
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.
Two of these top 76 Communication Services pups by yield qualify as a 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 Sweet Success (Dogs of the Week III) launched in early September. Click here to subscribe or get more information.
Make investing gains again. Catch your underdog on Facebook!
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Analyst’s 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.
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