54 Top Nasdaq October Dividend Dogs By Yield, Upside And Net Gains

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Includes: ADI, AMAT, AVGO, KHC, KLAC, LRCX, MCHP, MXIM, PAYX, PEP, QCOM, STX, SWKS, TXN, VOD, WDC
by: Fredrik Arnold
Summary

"The Nasdaq-100 Index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization." 54 pay dividends.

Top 10 broker target-estimated Nasdaq net gains as of 10/30/18 ranged 26.65%-72.28% from ADI, AVGO, SWKS, KLAC, STX, LRCX, VOD, WDC, MCHP and AMAT.

54 Dividend-paying Nasdaq 100 index stocks ranged in estimated yield from 0.3% to 9.48%. Top 10 PEP, KLAC, TXN, PAYX, MXIM, QCOM, KHC, WDC, STX, and VOD averaged 4.62%.

Nasdaq 100 index top 10 firms by broker target price upsides, AVGO, KLAC, SWKS, STX, LRCX, VOD, WDC, MCHP, WYNN, and AMAT, averaged 50.42% in broker-estimated price gains.

$5k invested in the lowest-priced five top-yield Nasdaq dividend stocks showed 36.91% more net-gain than $5k invested in all 10.  Low price little stocks ruled the October Nasdaq 54.

Actionable Conclusions (1-10): Brokers Forecast 26.65% To 72.28% Net Gains From October's Nasdaq Top 10

Four of 10 top yield Nasdaq dividend stocks were identified as being among the top 10 net gainers for the coming year based on analyst one-year target prices. (They are tinted gray in the chart above). So, our yield-based forecast for Nasdaq 53 divi-dogs was graded by Wall St. brokers as 40% accurate.

Projections based on estimated dividend returns from $1k invested in each of the high yield stocks and their aggregate one-year analyst-estimated median target prices, as reported by YCharts, created the 2018-19 data points. Note: one-year target prices by lone analysts were not applied. 10 probable profit-generating trades projected to October 29, 2019 were:

Applied Materials Inc. (AMAT) was projected to net $722.75 based on dividends, plus median target price estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to volatility 49% more than the market as a whole.

Microchip Technology (MCHP) was projected to net $661.67, based on a median target estimates from 20 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 10% over the market as a whole.

Western Digital Corp. (WDC) was projected to net $650.29 based on dividends, plus median target price estimates from 30 analysts, less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.

Vodafone Group (VOD) was projected to net $623.05, based on target price estimates from three analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.

Lam Research (LRCX) was projected to net $439.04, based on dividends, plus a mean target price estimate from 22 analysts, less broker fees. The Beta number showed this estimate subject to volatility 33% more than the market as a whole.

Seagate Technology (STX) netted $406.51 based on a median target price estimate from 27 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 70% more than the market as a whole.

KLA-Tencor (KLAC) was projected to net $345.72 based on dividends, plus a median target estimate from 15 analysts, less broker fees. The Beta number showed this estimate subject to volatility 60% more than the market as a whole.

Skyworks Solutions Inc (SWKS) was projected to net $338.61, based on dividends, plus a mean target price estimate from 28 analysts, less broker fees. The Beta number showed this estimate subject to volatility 40% less than the market as a whole.

Broadcom (AVGO) was projected to net $336.05 based on a median target price estimate from 34 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 10% less than the market as a whole.

Analog Devices Inc. (ADI) was expected to net $266.47, based on dividends, plus the median of target price estimates from 26 analysts, less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.

The average net gain in dividend and price was estimated at 47.9% on $10k invested as $1k in each of these 10 dogs. This gain estimate was subject to average volatility 29% 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."

54 Nasdaq Dividend Stocks By Yield

Actionable Conclusions (11-20): 10 Top Nasdaq Dividend Stock Ranks By Yield

Top 10 Nasdaq dividend stocks selected 10/29/18 by yield represented four of 11 Morningstar sectors. Top yielding stock, the lone communication services representative, was Vodafone Group [1].

Second place Seagate Technology [2] was the first of six technology firms in the top ten. The other five technology representatives placed third, fifth, sixth, eighth and ninth. They were, Western Digital Corp. [3], Qualcomm (QCOM) [5], Maxim Integrated Products Inc. (MXIM) [6], Texas Instruments Inc. (TXN) [8], and KLA-Tencor Corp. [9].

Two Consumer defensive representatives took fourth and tenth places, Kraft Heinz (KHC) [4], and PepsiCo Inc. (PEP) [10]. Finally, a lone industrial representative placed seventh, Paychex (PAYX) [7], to complete the Nasdaq 100 top 10 pack of 54 by yield for October.

Actionable Conclusions: (21-30) Top 10 Nasdaq 100 Dividend Dogs Showed 32.44% To 71.81% Upsides To October 2019, With (31) One Downsider At The Bottom

To quantify top dog rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield "dog" metrics, analyst mean price target estimates became yet another tool to dig out bargains.

Analysts Predicted A 36.91% Advantage For Five Highest Yield, Lowest-Priced Nasdaq Top 10 Dividend Stocks To October 2019

10 top Nasdaq 100 dividend dogs were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top 10 Nasdaq dividend stocks represented five of the 11 Morningstar sectors.

Actionable Conclusions: Analysts Projected Five Lowest-Priced of the Top 10 Highest-Yield Nasdaq 100 Stocks (32) To Fetch 41.29% Vs. (33) 30.16% Net Gains by All 10 by October 2019

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 Nasdaq dividend kennel by yield were predicted to produce 36.91% more gain than $5k invested as $.5k in all 10. The third lowest priced Nasdaq top yield stock, Western Digital Corp., was projected to deliver the best net gain of 65.03%.

The five lowest-price Nasdaq top 10 dividend stocks October 29 were: Vodafone Group, Seagate Technology, Western Digital Corp., Maxim Integrated Products Inc., The Kraft Heinz Co., with prices ranging from 18.86 to $55.65.

Five higher-priced Nasdaq dividend stocks for October 29 were: Qualcomm Inc., Paychex, KLA-Tencor Corp., Texas Instruments Inc., PepsiCo Inc., whose prices ranged from $63.18 to $113.77.

The distinction between five low-priced dividend dogs and the general field of 10 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 Nasdaq dividend 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. Dog photo: pinterest.com.com

Disclosure: I am/we are long CSCO, INTC. 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.