Actionable Conclusions (1-10): Analysts Estimated 12.43% To 29.66% Net Gains For Ten S&P 500 Dogs To July 2019
Two of ten top S&P 500 dividend stocks 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 20% accurate.
Projections were based on estimated dividends from $1000 invested in each of the thirty highest yielding stocks and their aggregate one year analyst median target prices, as reported by YCharts. Note: one year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to July 9, 2019 were:
Invesco (IVZ) was projected to net $296.6, based on dividends, plus a mean target price estimate from ten analysts, less broker fees. The Beta number showed this estimate subject to volatility 67% more than the market as a whole.
Philip Morris International (PM) was projected to net $262.06, based on dividends, plus a mean target price estimate from twenty analysts, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.
Nielsen Holdings (NLSN) was projected to net $247.25, based on dividends, plus a mean target price estimate from sixteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 4% less than the market as a whole.
Williams Companies (WMB) netted $233.54 based on a median estimate from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 40% more than the market as a whole.
Altria Group (MO) was projected to net $196.82, based on a median target price estimate from sixteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.
Int’l Business Machines (IBM) was projected to net $181.47, based on dividends, plus median target price estimates from twenty-five analysts, less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.
Kinder Morgan (KMI) was projected to net $151.27, based on a median target estimates from twenty-one analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.
Ford Motor (F) was projected to net $149.64, based on target price estimates from twenty-three analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 2% more than the market as a whole.
GGP Inc. (GGP) was projected to net $132.70, based on a median target price estimate from eleven analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.
Verizon Communications (VZ) was projected to net $124.26 based on dividends, plus a median target estimate from thirty-three brokers, less transaction fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.
The average net gain in dividend and price was estimated at 24.7% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 4% 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 7/9/18 by yield represented six of eleven Morningstar sectors. First place was claimed by the lone one of the industrials, Iron Mountain (IRM) . Second top yielding stock, was one from the consumer cyclical sector , L Brands (LB) . One communication services representative placed third, AT&T (T) .
Then, the top of two utilities placed fourth, PPL Corporation (PPL) . The other utilities firm ranked tenth, Southern (SO) . The first of three real estate sector representatives, placed fifth, HCP, Inc. (HCP) , which was followed by two in seventh and eighth places, Welltower (WELL) , and Ventas (VTR) .
Finally, one consumer defensive representative showed in sixth place, Philip Morris International (PM) , to complete the S&P 500 top ten by yield for July.
Actionable Conclusions: (21-30) Top Ten S&P 500 Dogs Showed 9.78% To 27.22% Upsides To July, 2019; (31) The Lowest of Five Downsiders Was -4.59%.
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 Cast A 3.39% Advantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To July 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 7/9/18 showing the highest dividend yields represented six of eleven in the Morningstar sector scheme.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield S&P 500 Dogs (32) Delivering 7.41% Vs. (33) 7.17% Net Gains by All Ten by July, 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 3.39% more gain than $5,000 invested as $.5k in all ten. The highest priced S&P 500 top yield dog, Philip Morris International (NYSE:PM), was projected to deliver the best net gain of 26.21%.
The five lowest-priced top yield S&P 500 dividend dogs for July 9 were: Ford Motor (F); HCP, Inc. (HCP); PPL Corporation (PPL); AT&T, Inc. (T); Iron Mountain (IRM), with prices ranging from $11.20 to $36.50.
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: fanpop.com
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Make investing gains again. Catch your underdog on Facebook!
At 8:45 AM nearly every NYSE trading day on Facebook/ Dividend Dog Catcher Fredrik Arnold does a quick live video summary of one of four or five stocks contending for a weekly slot in the Safari To Sweet Success portfolio.
Just go to Facebook/Dividend Dog Catcher at 8:45 AM most trading days and watch, like, comment and share the videos. And come back anytime for replays.
Yet always remember: Root for the Underdog.
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.