Actionable Conclusion (1-10): Brokers Asserted 7.43% To 49.28% Net Gains For Ten Basic Materials Stocks By June 2019
Eight of ten top-yielding Basic Materials stocks (tinted in the chart above) were verified as being among the top ten net gainers for the coming year based on analyst 1-year target prices. Thus, the yield-based forecast for the June Basic Materials stocks as graded by Wall St. wizards was 80% accurate.
The following probable profit-generating trades were identified by estimated dividend returns from $1000 invested in each highest yielding stock. That dividend and the aggregate one year analyst median target price, as reported by YCharts, created the 2018-19 data. Ten probable profit-generating trades projected to June 11, 2019 were:
Braskem (BAK) was projected to net $492.77, based on dividends, plus median target price estimates from five analysts, less broker fees. The Beta number was showed this estimate subject to volatility 19% more than the market as a whole.
SunCoke Energy Partners (SXCP) was projected to net $352.67, based on target price estimates from four analysts, plus projected annual dividend, less broker fees. The Beta number was showed this estimate subject to volatility 40% more than the market as a whole.
Alliance Resource (ARLP) was projected to net $339.80, based on target price estimates from four analysts, plus projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 25% less than the market as a whole.
CONSOL Coal Resources (CCR) was projected to net $287.69, based on dividends plus a median target price estimate from five analysts, less broker fees. A beta number was not available for CCR.
Ciner Resources (CINR) was projected to net $231.41, based on dividends, plus mean target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to volatility 12% more than the market as a whole.
Westlake Chemical (WLKP) was projected to net $155.82, based on dividends plus the median of six analyst estimates, less broker fees. The Beta number showed this estimate subject to volatility 6% more than the market as a whole.
Kumba Iron Ore (OTCPK:KUMBF) was projected to net $155.18, based on dividends alone, less broker fees. The Beta number showed this estimate subject to volatility 30% more than the market as a whole.
Enviva Partners (EVA) was projected to net $136.41, based on dividends plus a median target price estimate from four analysts, less broker fees. The Beta number showed this estimate subject to volatility 6% more than the market as a whole.
Acerinox (OTCPK:ANIOY) netted $126.02 based on dividends alone, less broker fees. The Beta number showed this estimate subject to volatility 49% more than the market as a whole.
PT Bukit Asam (OTCPK:TBNGY) was projected to net $74.27, based on dividends alone with no target price estimates from analysts, less broker fees. The Beta number showed this estimate subject to volatility 34% more than the market as a whole.
Average net gain in dividend and price was estimated at 23.52% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 16% over the market as a whole.
Top 50 Basic Materials Dogs By Yield Represented 10 Of 13 Industries For June
Yield (dividend / price) results from YCharts June 11 verified by YahooFinance for fifty stocks from ten Basic Materials Industries produced the actionable conclusions in this article.
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 June Basic Materials Equities By Yield
Actionable Conclusion (11-20) Yield Metrics Selected 10 Top Basic Materials Stocks
Top ten Basic Materials stocks selected 6/11/18 showing top yields represented just four of thirteen industries constituting the sector:(1) industrial metals & minerals [3 listed]; (2) steel [2 listed]; (3) coal [4 listed]; (4) lumber and wood [1 listed].
Best yield basic materials 'WallStar' stock was the top of three industrial metals & minerals firms, Kumba Iron Ore (OTCPK:KUMBF) . The other two industrial metals representatives placed seventh, and eighth, Ciner Resources (CINR) ; Vedanta (VEDL) .
Third through sixth slots were occupied by the four coal representatives, CONSOL Coal Resources (CCR) , Alliance Resource (ARLP) , SunCoke Energy Partners (SXCP) , and PT Bukit Asam (OTCPK:TBNGY) .
The eighth position was assumed by lumber an wood representative, Enviva Partners (EVA) , which completed the top ten June Basic Materials top list by yield.
Actionable Conclusions: (21-27) Seven Basic Materials Stocks Showed 7.3% To 43.2% Upsides, To June, 2019
To quantify top 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 became another tool to dig out bargains.
Analysts Forecast A 46.86% Disadvantage For 5 Highest Yield, Lowest Priced Basic Materials Stocks By June, 2019
Ten top Basic Materials stocks were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.
As noted above, top ten Basic Materials dogs selected 6/11/18 showing the highest dividend yields represented four industries in the basic materials sector.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield 'WallStar' Basic Materials Stocks (28) Delivering 9.76% Vs. (29) 18.36% By June, 2019
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten dividend 'WallStar' Basic Materials kennel by yield was predicted by analyst 1-year targets to deliver 46.86% less net gain than $5,000 invested as $.5k in each of all ten. The sixth lowest priced Basic Materials top yield dog, SunCoke Energy Partners (NYSE:SXCP), was projected to deliver the best net gain of 35.27%.
The five lowest-priced top-yield Basic Materials stocks as of June 11 were: PT Bukit Asam (OTCPK:TBNGY); Acerinox (OTCPK:ANIOY); Erdemir (OTCPK:ERELY); Kumba Iron Ore (OTCPK:KUMBF); Vedanta (VEDL), with prices ranging from $6.04 to $14.59.
Five higher-priced Basic Materials as of June 11 were: SunCoke Energy Partners (SXCP); CONSOL Coal Resources (CCR); Alliance Resource (ARLP); Ciner Resources (CINR); Enviva Partners (EVA), whose prices ranged from $16.10 to $30.05.
That distinction between the 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.
Stocks listed above were suggested only as possible reference points for your Basic Material 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 or YCharts. Dog photo: pinterest.com
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Make investing gains again. Catch your underdog on Facebook!
At 8:45 AM every NYSE trading day on Facebook/Dividend Dog Catcher, Fredrik Arnold gives a quick live video summary of one of four or five sector-selected stocks contending for a single weekly opening in the Safari To Sweet Success portfolio.
Go to Facebook/Dividend Dog Catcher any trading day at 8:45 AM to watch, comment and share the live video. Of course you are also welcome the catch the replay anytime.
Yet, always remember: Root for the Underdog.
Disclosure: I am/we are long VEDL.
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.