90 Champions, Contenders And Challengers Are Dividend Stars In November Per Wall Street Targets

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Includes: ANDX, APU, CMP, CVX, DKL, ENB, EPD, EQM, HEP, HMLP, MMP, NRZ, PBF, SRLP, TLP, VGR
by: Fredrik Arnold

Summary

Champion dividend stocks sustain 25 or more annual dividend increases; Contenders show 10-24; Challengers have 5-9. WallStar selections all show .05% or higher price target upsides.

Top 30 Broker November Dividend ChamConChal (CCC) price target upsides showed Champions ranged 8.22%-39.23%; Contenders 9.6%-100.9%; Challengers 13.8%-61.3% as of 11/6/18.

30 Top CCC Yields for Champion stocks ranged 2.6%-6.5%; 30 Contender yields ranged 3.9%-11.9%; 30 Challenger yields were 5.7%-11.6%.

$5k invested in the lowest-priced five November top-yield CCC stocks showed 6.8% more net gain than from $5k invested in all 10.

Actionable Conclusions (1-10): Analysts Project 21.16% To 43.27% Net Gains For Top 10 CCC WallStar Stocks Come November 2019

Four of 10 top dividend-yielding CCC WallStar stocks (tinted gray in the chart above) were among the top 10 gainers for the coming year based on analyst 1-year target prices. So this month the dog strategy for the CCC WallStars graded out with 40% accuracy.

The following probable profit-generating trades were based on estimated dividend returns from $1k invested in each of the highest yielding stocks. Those dividends and their aggregate one-year analyst 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 November 6, 2019 were:

EQT Midstream Partners LP (EQM) was projected to net $432.72, based on a mean target price estimate from 15 analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 13% more than the market as a whole.

Enbridge Inc. (ENB) was projected to net $370.86, based on dividends, plus the median of annual price estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to volatility 48% less than the market as a whole.

Enterprise Products Partners (EPD) was projected to net $301.38, based on dividends, plus median target price estimates from 24 analysts, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Sprague Resources LP (SRLP) was projected to net $286.75, based on dividends, plus a mean target price estimate from three analysts plus dividend less broker fees. The Beta number showed this estimate subject to volatility 28% more than the market as a whole.

TransMontaigne Partners (TLP) was projected to net $250.71, based on dividends, plus mean target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to volatility 82% less than the market as a whole.

Magellan Midstream (MMP) was projected to net $246.95, based on dividends, plus a mean target price estimate from 20 analysts, less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.

New Residential Investment (NRZ) was projected to net $225.65, based on a median target price estimate from four analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Chevron Corp. (CVX) was projected to net $221.21, based on dividends, plus a mean target price estimate from 24 analysts, less broker fees. The Beta number showed this estimate subject to volatility 12% more than the market as a whole.

Compass Minerals International (CMP) was projected to net $219.23, based on dividends, plus median target price estimates from 10 analysts, less broker fees. The Beta number showed this estimate subject to volatility 5% more than the market as a whole.

Hoegh LNG Partners (HMLP) was projected to net $211.55, based on dividends, plus mean target price estimates from 10 analysts, 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 estimated at 27.67% on $10k invested as $1k in each of these 10 stocks. This gain estimate was subject to average volatility 13% less than the market as a whole.

Top 30 Champions, 30 Contenders, and 30 Challengers Represented 9 Of 11 Sectors For November

Results from drip investing listed as of 10/31/18 sorted by yield (dividend/price) calculated from here 11/6/18 for 90 stocks from 9 of eleven Morningstar sectors contributed to the various actionable conclusions discussed in this article.

The U.S. Dividend Champions were dutifully maintained by Dave Fish of Moneypaper's DirectInvesting.com, whose articles appeared here on Seeking Alpha. Too soon, and sadly, Dave Fish has passed away. His Champions, Contenders, and Challengers will live on, however. Champions are selected based on "25 or more straight years of higher dividends." Contenders show "10 to 24 straight year of higher dividends" and Challengers have "5 to 9 straight years of higher dividends." The list as of 9/28/18 provided the subjects for this article. Numeric calculations for the list were made as of 11/6/18 from YCharts data.

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 30 Dividend Champions

U.S. Dividend Champions were selected based on "25 or more straight years of higher dividends." Their ranking by yield is shown on the left side chart below and their ranking by price target upsides is on the right.

Top 30 Dividend Contenders

U.S. Dividend Contenders were selected based on "10 to 24 straight years of higher dividends." Their ranking by yield is shown on the left side chart below and their ranking by price target upsides is on the right.

Top 30 Dividend Challengers

U.S. Dividend Challengers were selected based on "5 to 9 straight years of higher dividends." Their ranking by yield is shown on the left side chart below and their ranking by price target upsides is on the right.

Actionable Conclusion (12-21) Dividend Yield Metrics Selected 10 Top CCC Stocks

Top 10 Champion/Contender/Challenger Dividend stocks selected 10/31/18 showing top yields as of 11/6/18, were three contenders and seven challengers representing five sectors in the Morningstar eleven sector scheme: (1) consumer defensive [1 listed], (2) real estate [1 listed], (3) energy [6 listed], (4) utilities [1 listed], (5) industrial [1 listed].

Tops was the lone consumer defensive sector representative, a contender, Vector Group Ltd. (VGR).

In second place was the real estate firm, New Residential Investment (NRZ) [2].

Energy firms claimed the third, through sixth, ninth and tenth positions: Sprague Resources (SRLP) [3], Delek Logistics Partners LP (DKL), [4] Andeavor Logistics LP (ANDX) [5], EQT Midstream Partners LP (EQM) [6], PBF Logistics LP (NYSE:PBFX) [9], Holly Energy Partners LP (HEP) [10], the third contender.

The loner of Utilities, and the second contender on the list, placed seventh by yield, AmeriGas Partners LP (APU) [7]. Finally, the lone industrial placed eighth on the list, Hoegh LNG Partners LP [8] was the seventh challenger and completed this list for November.

Actionable Conclusions: (22-31) 10 CCC Stocks Showed 11.54% To 21.08% Upsides, While (32) None Showed Downsides To November 2019

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 another tool to dig out bargains.

Brokers Estimated A 6.8% Advantage For Five Highest Yield, Lowest Priced CCC Stocks To November 2019

10 top CCC WallStar Dividend dogs were culled by yield for their monthly update from here. Yield (dividend/price) results verified by Yahoo Finance did the ranking.

As noted above, top 10 Dividend CCC stocks selected 9/28/18 showing the highest dividend yields as of 11/6/18 accounting represented five sectors in the Morningstar 11-sector scheme.

Actionable Conclusions: Analysts Estimated Five Lowest-Priced of the Top 10 Highest-Yield CCC (33) Delivering 20.10% Vs. (34) 18.82% Net Gains by All 10 by November 2019

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 Champion kennel by yield were predicted by analyst one-year targets to deliver 6.8% more net gain than $5k invested as $.5k in each of all 10. The 10th lowest priced CCC dividend stock, EQT Midstream Partners LP showed the best analyst-augured net gain of 43.27%.

The five lowest-priced CCC dividend stocks of November 6 were: Vector Group Ltd., New Residential Investment, Hoegh LNG Partners, PBF Logistics LP, Sprague Resources LP, with prices ranging from $13.44 to $23.70.

Five higher-priced CCC dividend stocks for November 6 were: Holly Energy Partners LP, Delek Logistics Partners LP, AmeriGas Partners LP, Andeavor Logistics LP, EQT Midstream Partners LP, whose prices ranged from $29.37 to $43.89.

That distinction between the 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 Champion 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 Yahoo Finance. Dog photo: naturalpawz.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.