Your 50 Top S&P 500 Stocks For Yield, Gains And Upside For September

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Includes: ABBV, F, GM, HCP, IRM, IVZ, KHC, KMI, LB, PM, PPL, SO, STX, T, VTR, WELL, WMB, WY
by: Fredrik Arnold

Summary

Broker target-estimated September top ten net gains ranged 14.25%-31.69% topped by GM 9/21/18. 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 3.7% to 7.9%. Top ten, WELL, NLSN, VTR, PM, HCP, PPL, T, F, IRM, & LB averaged 5.94%.

S&P 500 index top ten firms by broker target price upsides, PM, F, WY, STK, KMI, ABBV, KHC WMB, IVZ, & GM averaged 18.6% upsides.

5k invested in the lowest-priced five September top-yield S&P 500 dividend stocks showed 13.97% more net-gain than from $5k invested in all ten.  Little low-price S&P 500 stocks rose to the fore.

Actionable Conclusions (1-10): Analysts Estimated 14.25% To 31.69% Net Gains For Ten S&P 500 Dogs To September 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 September 21, 2019 were:

General Motors Co (GM) was projected to net $316.92, based on a median target price estimate from twenty-one analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 56% more than the market as a whole.

Invesco (IVZ) was projected to net $288.10, based on dividends, plus a mean target price estimate from seventeen analysts, less broker fees. The Beta number showed this estimate subject to volatility 65% more than the market as a whole.

Williams Companies (WMB) netted $248.29 based on a median estimate from nineteen analysts, plus dividends. The Beta number showed this estimate subject to volatility , 51% more than the market as a whole.

The Kraft Heinz Co. (KHC) was projected to net $217.75, based on a median target price estimate from twenty-three analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.

AbbVie Inc (ABBV) was projected to net $208.48, based on dividends, plus median target price estimates from twenty-one analysts, less broker fees. The Beta number showed this estimate subject to volatility 54% more than the market as a whole.

Kinder Morgan (KMI) was projected to net $198.16, based on a median target estimates from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 30% less than the market as a whole.

Seagate Technology PLC (STX) was projected to net $185.76 based on dividends, plus a median target estimate from twenty-eight brokers, less transaction fees. The Beta number showed this estimate subject to volatility 72% more than the market as a whole.

Ford Motor (F) was projected to net $175.94, based on target price estimates from twenty-one analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Weyerhaeuser Co (WY) was projected to net $157.22, based on dividends, plus a mean target price estimate from twelve analysts, less broker fees. The Beta number showed this estimate subject to volatility 38% more than the market as a whole.

Philip Morris International (PM) was projected to net $142.51, based on dividends, plus a mean target price estimate from twenty analysts, less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.

The average net gain in dividend and price was estimated at 26.74% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average volatility 25% more 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 Send Signals

Top ten S&P 500 stocks selected 9/21/18 by yield represented six of eleven Morningstar sectors. First place was claimed by one of two from the consumer cyclical sector, L Brands (LB) [1]. The other consumer cyclical representative placed third, Ford Motor Co (F) [3].

Second place went to the lone industrials, Iron Mountain (IRM) [2]. The lone communication services representative placed fourth, AT&T (T) [4].

The first of three real estate sector representatives, placed fifth, Ventas (VTR) [5], followed in sixth by HCP, Inc. (HCP) [6], which was trailed by the tenth place real estate finisher Welltower (WELL) [10].

Then, two representatives from utilities placed seventh, and eighth, PPL Corporation (PPL) [7], and Southern Co (SO) [8]. Finally, one consumer defensive representative showed in ninth place, Philip Morris International (PM) [9], to complete the S&P 500 top ten by yield for September.

Actionable Conclusions: (21-30) Top Ten S&P 500 Dogs Showed 10.8% To 29.4% Upsides To September, 2019; (31) One Low Downsider Was WELL at -1.53%.

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 Forecast A 13.97% Advantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To September, 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 9/21/18 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 11.01% Vs. (33) 9.66% Net Gains by All Ten Come September, 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 13.97% more gain than $5,000 invested as $.5k in all ten. The very lowest priced selection, Ford Motor (F), was projected to deliver the best net gain of 17.59%.

The five lowest-priced top yield S&P 500 dividend dogs for September 21 were: Ford Motor (F); HCP Inc (HCP); PPL Corporation (PPL); L Brands (LB); AT&T, Inc. (T), with prices ranging from $9.85 to $33.78.

Five higher-priced S&P 500 dividend dogs for September 21 were: Iron Mountain (IRM); Southern Co (SO); Ventas (VTR); Welltower (WELL); Philip Morris International (PM), whose prices ranged from $35.91 to $83.75.

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: littlethings.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.