10 Dividend Achievers Alleged To Gain 27.5% To 62.92% Come December 2019 By Broker Targets

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Includes: APU, CMP, EPD, ET, GIS, HEP, IBM, IVZ, LAZ, MMP, OXY, R, SEP, T, TCP, TLP, VGR
by: Fredrik Arnold
Summary

Dividend Achiever stocks are distinguished by 10 or more straight years of higher dividends. Some 266 Achiever equities are balanced by sectors and capitalization. PFM is their tracking ETF.

Broker target-estimated December top 10 Dividend Achiever net gains ranged 27.5%-62.92%, from GIS, MMP, IBM, CMP, EPD, OXY, APU, LAZ, R, and topped by ET, as calculated 12/11/18.

30 Top Dividend Achievers ranged in yield from 3.88% to 14.51%. Top 10 EPD, T, IVZ, TLP, ET, TCP, SEP, HEP, APU and VGR averaged 9.13% yield.

Top 10 Achiever price upsides by GIS, MMP, IBM, CMP, EPD, APU, OXY, LAZ, R, and ET averaged 35.57% per one-year broker targets.

$5k invested in the lowest-priced five December top yield 10 Achiever stocks showed 6.85% more net gain than from a $5k investment in all 10.

Top 30 Dividend Achievers For December

Yield (dividend/price) results from here December 11, verified by YCharts, for 30 stocks from nine of 11 Morningstar sectors revealed the actionable conclusions discussed below.

"The NASDAQ Dividend Achievers Index is made up of 265 stocks with 10+ consecutive years of dividend increases that meet certain minimum size and liquidity requirements. It is one of the better sources for high quality dividend growth stocks." - suredividend.com

Source: YCharts

Actionable Conclusions (1-10): Broker Targets Forecast 40.11% Average Net Gains For 10 Dividend Achievers To December 2019

Three of 10 top dividend-yielding Achievers were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices. (The names are tinted in the list above). Thus, this month the dog strategy for the Achievers was graded by Wall St. watchers as 30% accurate.

The following probable profit generating trades were identified by projections based on estimated dividend returns from $1k invested in each of the 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. 10 probable profit-generating trades projected to December 11, 2019 were:

Energy Transfer LP (ET) was projected to net $629.15, based on dividends, plus mean target price estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to volatility 86% more than the market as a whole.

Ryder System Inc. (R) netted $497.81 based on dividends, plus mean target price estimates by three analysts, less broker fees. The Beta number showed this estimate subject to volatility 62% more than the market as a whole.

Lazard Ltd. (LAZ) was projected to net $472.05, based on dividends, plus the median of target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to volatility 85% more than the market as a whole.

AmeriGas Partners LP (APU) was projected to net $452.41, based on dividends, plus the median pf target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 54% less than the market as a whole.

Occidental Petroleum Corp. (OXY) was projected to net $374.44, based on dividends, plus mean target price estimates from 24 analysts, less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole.

Enterprise Products (EPD) was projected to net $362.99, based on the median of target price estimates by 24 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.

Compass Minerals (CMP) was projected to net $344.77, based on dividends, plus mean target price estimates from 10 analysts, less broker fees. The Beta number showed this estimate subject to volatility 34% less than the market as a whole.

International Business Machines (IBM) was projected to net $304.18, based on dividends, plus a mean target price estimate from 21 analysts, less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.

Magellan Midstream Partners (MMP) was projected to net $298.22, based on a median target price estimate from 21 analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.

General Mills Inc. (GIS) was projected to net $275.12, based on dividends, plus the median of target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to volatility 20% less than the market as a whole.

Average net gain in dividend and price was estimated at 40.11% on $10k invested as $1k in each of these 10 stocks. This gain estimate was subject to average volatility 8% more than the market as a whole.

Source: pamperedwhiskers.com

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 100 December Dividend Achievers

Source: YCharts

U.S. Dividend Achievers for this article were selected based on yield. This Base list of 100 equities (showing greater than 2.25% annual payouts) was reduced to 30 when the yield limit was set at 4.48%.

Actionable Conclusions (11-20): Yield Metrics Singled-Out 10 Top Dividend Achievers

Top 10 Dividend Achievers selected 12/11/18 by yield, represented five sectors in the Morningstar eleven sector scheme: (1) consumer defensive [1 listed], (2) utilities [1 listed], (3) energy [6 listed], (4) financial services [1 listed], and (5) communication services [1 listed].

Top Achiever stock by yield, was the lone consumer defensive sector equity Vector Group (VGR) [1]. The lone utilities representative in the top 10 placed second, AmeriGas Partners (APU) [2].

One of six energy representatives placed third, Holly Energy Partners (HEP) [4], to lead the Achiever top 10 energy team, followed by five more energy issues in slots four, through seven, and 10:

Spectra Energy Partners LP (SEP)[4]

TC PipeLines (TCP) [5]

Energy Transfer LP (ET) [6]

TransMontaigne Partners (TLP) [7]

Enterprise Products Partners LP (EPD) [10]

The financial services representative placed eighth, Invesco Ltd, (IVZ), and the communication services standout placed ninth, AT&T Inc. (T) [9], to complete the top 10 December Dividend Achiever top stocks by yield.

Actionable Conclusions: (21-30) 10 Achiever Dogs Showed 24.45% To 56.25% Upsides, While (31) One More Showed A Loss Of -0.89% By December 2019

Source: YCharts

To quantify top dog rankings, analyst mean price target estimates provide 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.

Analysts Determined A 6.85% Advantage For 5 Highest Yield, Lowest Priced Dividend Achiever Dogs To December 2019

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

Source: YCharts

As noted above, top ten Dividend Achiever dogs selected 12/11/18 and showing the highest dividend yields, represented five of the Morningstar eleven sector scheme.

Actionable Conclusions: (32) Analysts Predicted Five Lowest-Priced Of Top 10 Highest-Yield Achiever Dogs Delivering 25.30% Vs. (33) 23.68% Net Gains By All 10 Come November 2019

Source: YCharts

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 Dividend Achiever kennel by yield were predicted by analyst one-year targets to deliver 6.85% more net gain than $5k invested as $.5k in each of all 10. The second lowest-priced Dividend Achiever, Energy Transfer LP (ET), was found to deliver the best net gain at 62.91%.

Source: YCharts

The five lowest-priced dividend Achiever dogs as of December 11 were: Vector Group (VGR), Energy Transfer LP (ET), Invesco Ltd (IVZ), Enterprise Products Partners LP (EPD), Holly Energy Partners (HEP), with prices ranging from $11.03 to $28.65.

Five higher-priced dividend Achievers for December 11 were: AmeriGas Partners (APU), AT&T Inc. (T), TC PipeLines LP (TCP), Spectra Energy Partners (SEP), TransMontaigne Partners (TLP), whose prices ranged from $29.00 to $40.93.

This 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.

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 Dividend Achiever 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.

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.