Monthly Paid Dividends From 87 All Cap U.S. Equities And 80 Funds For November

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Includes: AGNC, AMJL, ATGFF, AVH, BRG, CEFL, CPTA, DVHL, EDF, EDI, GECC, GOOD, HCAP, MORL, MRRL, ORC, OXLC, PSEC, REML, SCM, SJT, SMHD, SUNS, TAHO, VET
by: Fredrik Arnold
Summary

November's U.S. Exchange monthly-paid dividends, upsides, and net-gains: 1. Stocks by yield >0.5% (87); 2. Stocks by price-upside (30); 3. Closed-End Investments, Exchange-Traded Funds/Notes (CEICs/ETFs/ETNs) by yield (80).

U.S. MoPay equities expanded a little in numbers (and gains). Canadian MoPays have a separate write-up. CEICs/ETFs/ETNs are combined and limited to yields over 7.17%.

Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs.Equities; 4. Fund risks/rewards. All per prices as of 11/2/18.

Analyst annual targets revealed that investing $5k in the lowest priced five of ten top yield MoPay US exchange equities produced 10.97% more gains than $5k invested in all ten.

Actionable Conclusions (1-10): Analysts Predicted Top Ten MoPay Equities to Net 12.32% to 52.42% Gains By November 2019

Seven of the ten top yield MoPay stocks (shaded in the chart above) were verified as being among the Top ten gainers for the coming year based on analyst 1 year target prices. Thus the yield-based strategy for this MoPay group as graded by analyst estimates for this month proved 70% accurate.

Projections based on estimated dividend amounts from $1000 invested in each of the highest yielding stocks and the one year analyst median target prices for those stocks, as reported by YCharts, made the data points. Note: one year target prices from one analyst were not applied (n/a). Ten probable profit-generating trades to 2019 were:

Vermilion Energy Inc (VET) netted $524.17, based on dividend plus mean target price estimates from sixteen analysts less broker fees. The Beta number showed this estimate subject to volatility 17% less than the market as a whole.

Great Elm Capital Corp (GECC) netted $518.92 based on a median target price estimates from three analysts, plus dividends less broker fees. A Beta was not available for GECC.

Capitala Finance Corp (CPTA) netted $441.30.66, based on dividend, plus a median target price estimate from seven analysts less broker fees. The Beta number showed this estimate subject to volatility 5% less than the market as a whole.

Avianca Holdings SA (AVH) was forecast to net $407.09 based on mean target price estimates from seven analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 33% less than the market as a whole.

Stellus Capital Investment (SCM) netted $259.19 based on a mean target estimate from five analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to volatility 32% less than the market as a whole.

Solar Senior Capital (SUNS) netted $211.88 based on the median of target estimates from three analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 44% less than the market as a whole.

Gladstone Commercial (GOOD) netted $190.19 based on dividends plus the median of annual price estimates from six analysts less broker fees. The Beta number showed this estimate subject to volatility 29% less than the market as a whole.

San Juan Basin Royalty Trust (SJT) netted $155.89 based on no target price estimates from analysts, just dividends less broker fees. The Beta number showed this estimate subject to volatility 8% opposite the market as a whole.

Orchid Island Capital (ORC) netted $125.45 based only on dividends less broker fees. The Beta number showed this estimate subject to volatility 62% less than the market as a whole.

AltaGas Ltd (OTCPK:ATGFF) was forecast to net $113.48 based only on dividends less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.

Average net gain in dividend and price was 29.57% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average volatility 44% 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 specifically, these are, in fact, best called "underdogs".

November Monthly Pay Dividend Data

Three buy and hold lists produced numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, November 2 closing prices and estimated annual dividends were referenced in YCharts. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) a high yield (and higher risk) MoPay CEICs/ETFs/ETNs list.

Monthly Pay Dividend Qualities

Quarterly, Semi-Annual and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.

Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.

This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Three prominent MoPay firms declared dividend cuts between December 2016 and March 2017.

Former MoPay top ten regular by yield. Blue Bluerock Residential (BRG) announced in December it is retreating to quarterly dividend payments "in keeping with industry tradition."

Third, Capitala Finance Corp (CPTA) cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017.

For nine months, Tahoe Resources (TAHO) skipped its monthly payouts and has been dropped as a MoPay resource.

Top yield stock for October 2016, Orchid Island Capital (ORC), released this cautionary note with its monthly dividend announcements: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back-up their words with actions cutting the dividend from $0.14 to $0.11 in February 2018, to $0.09 in March, and to $0.08 for September.

The U.S. MoPay segment is volatile and transitive. More over-the-counter trades in monthly pay equities are available from Canadian firms.

Readers said:

"[A] problem with this analysis is you are comparing companies of VERY different varieties. REITs pay no taxes and their distributions are classified as ordinary income and thus not subject to the 15% or 20% tax rate. MLPs also pay little no taxes at the corporate level, but instead have "distributions"... Comparing REITs, MLPs and regular corporations thus requires a financial analysis...not include[d]." --arbtrdr

"[Y]ou list a few issues here whose distributions are rife with RETURN OF CAPTAL [ROC] at its most destructive form, funds that pay you back your own money each and every month in their distributions with no regard to what they truly earn...- these should not be included in any list containing the word "dividend". --NYer1

"I can enter or exit a position and still reap dividends for at least 2/3s of the quarter. They also smooth the income stream so I have cash at any given time to make a purchase at dips." --Ed Invests

"Dividend dog investing really works well for income in my experience. I have been seriously invested in dogs the more unloved the better." --Urbannek

"...Nice to see another contrarian strategy. This one seems to take a lot of attention in comparison [to Dow dogs], but I like the monthly rebalance." --colodude

"At this level of risk, I'm only buying monthly dividend payers. Dividend if cut only [sits] for a month and not a quarter." --Sinjjn Smythe

"...love those monthly payers." --Hardog

"Some of us are comfortable investing in Dog stocks because we feel the reward is worth the risk. As long as [my sin stock] continues to pay and raise the dividend like it has for 16 years now, it will have a spot in my portfolio." --Miz Magic DiviDogs

"One thing to point out: These stocks are not buy & hold. If you buy any of these stocks, set a price where you will sell... trailing stops work real good & with mopays you can get out & get back in without losing a whole quarter of dividends..." --drking

"I don't know how many times I've kicked myself for not investing in a beaten down group only to find it spring back up months later." --User 13258352

List One: 87 US Monthly Pay Dividend Equities by Yield

Top ten of these US exchange listed monthly pay dividend equities showing the best yields into November represented four of the eleven Morningstar market sectors, with representative firms split 2 to 2 to 1 to 5 between the energy, real estate, industrials, and financial services sectors.

Tops for November was one of two energy sector representatives, San Juan Basin Royalty Trust (SJT) [1], led the pack and the other top ten energy representative, placed fourth, AltaGas Ltd (OTCPK:ATGFF) [4].

In second place was the first of two real estate representatives, Orchid Island Capital (ORC) [3], a stalwart in the MoPay kennel. The other RE firm placed sixth, AGNC Investment (AGNC) [6].

The lone industrial sector representative placed third, Avianca Holdings SA (AVH) [3].

Finally, five financial sector representatives placed fifth, and seventh through tenth: Great Elm Capital Corp (GECC) [5], and Capitala Finance Corp (CPTA) [7]; Stellus Capital Investment Corp (SCM) [8]; Harvest Capital Credit (HCAP) [9], and Prospect Capital Corp (PSEC) [10] to complete the November MoPay top ten list by yield.

List Two: Monthly Pay Dividend Equities by Price Upside

The results shown below from YCharts for MoPay dividend stocks as of market closing price November 2 were paired with analyst mean target prices one year out. Eight top stocks displayed 1.87% to 46.32% price upsides for the next year based on analyst 1 yr. targets.

Seven of the ten (tinted) on this price upside list were members of the top ten list by yield. In first place on this upside list was Vermilion Energy Inc (VET) [1].

Following were Great Elm Capital Corp (GECC) [2], Capitala Finance Corp (CPTA) [3], Avianca Holdings SA (AVH) [4], Stellus Capital Investment Corp (SCM) [5], Solar Senior Capital Ltd (SUNS) [6], Gladstone Commercial Corp (GOOD) [7], AGNC Investment Corp (AGNC) [8], San Juan Basin Royalty Trust (SJT) [9], and Orchid Island Capital Inc (ORC)[10].

Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.

Those seven MoPay stocks showing the highest upside price potential into 2019 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate mean target price estimates.

List Three: Monthly Pay Dividend Closed End Investment Companies, Exchange Traded Funds, and Notes, by Yield

Eighty top monthly dividend paying (MoPay) Closed End Funds, Exchange Traded Funds and Notes listed above were culled from nearly 800 candidates. Yields greater than 15.2% calculated as of November 2 determined the top ten.

The top ten monthly paying dividend investment companies, funds, & notes showing the biggest yields for November by YChart & YahooFinance data featured seven uncollateralized debt instruments [ETNs], and three closed-ended investment companies [CEICs].

Exchange traded notes captured the top six, and the tenth position: Credit Suisse XLinksMP2xLvgMortREIT ETN (REML) [1]; UBS ETRACS M Py 2xLvg MortgREIT ETN SerB (MRRL) [2]; UBS ETRACS Mthly Py 2xLvg Mortg REIT ETN (MORL) [3]; UBS ETRACS M Py 2xLvg US Sm Cp HiDiv ETN (SMHD) [4]; Credit Suisse X-Links MP2xLvgAlrnMLP ETN (AMJL) [5]; UBS ETRACS Mthly Py 2xLvg Closed-End ETN (CEFL) [6]; UBS ETRACS M Py 2xLvg Divers Hi Inc ETN.(DVHL) [10].

Three CEICs placed seventh, through hinth, Stone Harbor Emerging Mkts Income (EDF) [7]; Oxford Lane Capital (OXLC) [8], and Stone Harbor Emg Mkts Total Income (EDI) [9]. This completed the top ten Closed End Investment Companies, Exchange Traded Funds and Notes list for November, 2018.

Compare Equity To Fund Performance

Note that the top ten equity dividends are again 1% lower priced than those of the top ten funds. This is a new order in the dividend dog kennel.

Background and Actionable Conclusions

Since June 2012 reader suggestions to include funds, trusts, and partnerships, a list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. That list was supplemented by an upside potential article in October and a upside vs. buy & hold in November. Another list factored December 2012 reader comments.

In January, February, March, April, May, June, July, August, September, October, November, and December 2013 readers contributed.

Reader suggestions continued in 2014 following the January, February, March, April, May, June, July, August, September, October, November, and December articles.

2015 continued with readers contributing in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2016 articles in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2017 articles of January, February, March, April, May, June, July, August, September, October, November, and December.

Again this year, the 2018 articles in January, February, March, April, May, June, July, August, September, and October, continued to compare and contrast MoPay equity upside potential to the now lower yield (but higher risk) buy and hold Exchange Traded Funds and Notes constituents.

Yield Metrics Found A Nice Gain From Five Lowest Priced High Yield MoPay Equities

Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and YahooFinance, produced the following charts.

Actionable Conclusions: Analysts Estimated (12) 5 Lowest Priced of Top Ten High Yield MoPay Dividend Stocks Would Produce 26.3% VS. (14) 23.7% Net Gains from All Ten by November, 2019

$5000 invested as $1k in each of the five Lowest priced stocks of the top ten MoPay dividend dog kennel by yield were predicted by analyst 1 year targets to deliver 10.97% more net gain than $5,000 invested as $.5k in all ten. The fifth lowest priced MoPay dividend dog, Great Elm Capital Corp (GECC), was predicted to deliver the best net gain of 51.89%.

Lowest priced five MoPay dividend stocks estimated November 2 were: San Juan Basin Royalty Trust (SJT); Avianca Holdings SA (AVH); Orchid Island Capital Inc. (ORC); Prospect Capital Corp (PSEC); Great Elm Capital Corp (GECC), with prices ranging from $5.15 to $8.12.

Higher priced five MoPay dividend equities estimated November 2 were: Capitala Finance Corp (CPTA); Harvest Capital Credit Corp (HCAP); AltaGas Ltd (OTCPK:ATGFF); Stellus Capital Investment Corp (SCM); AGNC Investment (AGNC), whose prices ranged from $8.28 to $17.67.

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 same technique, you now see, can also be used to find some rewarding dogs in the MoPay Stock kennel.

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.

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

Gains/declines as reported do not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as decent starting points for your MoPay dividend 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.ycharts.com; www.dividend.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog Photo: 3millondogs.com

Disclosure: I am/we are long MFCSF. 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 covers one or more microcap stocks. Please be aware of the risks associated with these stocks.