Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a follower favorite listing in this series of articles. Thus, it is possible that only rogues and discontinued or dreadful, doubtful dividend issues may appear.
Lately readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however, praise the effort to sort promising opportunities out of the thousands of dividend offers.
Most valuable, however, are those reader comments that truly catch errors in my calculations. Examples like my blunder claiming DF.TO a monthly pay when it only paid four dividends last year. Non-dividend paying Trez Capital (TZS.TO) and Canadian Life (LFE.TO) stocks last month. Showing Chevron (NYSE:CVX) as both a low price and higher price stock in the Aristocrats last month, and giving General Mills (NYSE:GIS) the GM ticker symbol in a previous month come to mind.
Below are 43 tangible results for the follower favorite and rogue equities and funds mentioned between November 17 and December 14.
Actionable Conclusions (1-10): Analysts Detected 48.67% To 169.77% Net Gains For 10 FoFa/Ro Stocks & Funds To December 2019
Six follower-favorite stocks were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices (They are tinted gray in the chart above). Thus, the yield-based forecast for the FoFave stocks, as graded by Wall St. wizards, was 60% 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. That dividend 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 a lone analyst were not applied. Ten probable profit-generating trades projected to December 17, 2019 were:
Dynagas LNG Partners LP (DLNG) was projected to net $1,697.69, based on dividends plus a huge median target price estimate from seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 5% over the market as a whole.
Capital Product Partners LP (CPLP) was projected to net $912.55, based on dividends, plus a median target price estimate from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 7% over the market as a whole.
Energy Transfer LP (ET) was projected to net $750.42, based on the median of target estimates from eighteen analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 86% more than the market as a whole.
Colony Capital Inc. (CLNY) netted $749.84 based on the median target price estimate from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 25% over the market as a whole.
Camtek Ltd (CAMT) was projected to net $702.04, based on a median target price estimate from two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 20% under the market as a whole.
Apollo Global Management LLC (APO) netted $666.67 based on dividends, plus the median of target price estimates from thirteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 25% more than the market as a whole.
Valero Energy Corp (VLO) was projected to net $634.95, based on target price estimates from nineteen analysts, plus annual dividends, less broker fees. The Beta number showed this estimate subject to volatility 8% more than the market as a whole.
Western Digital Corp (WDC) was projected to net $609.17, based on a median of target price estimates from thirty-one analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 15% more than the market as a whole.
AltaGas Ltd [ALA.TO] (OTCPK:ATGFF) was projected to net 512.39 (CAD) based on a median target price from fifteen analysts plus next year's $0.06/Q dividends, less broker fees. The Beta number showed this estimate subject to volatility 26% over the market as a whole.
Williams Companies Inc. (WMB) was projected to net $486.69, based on a median of target price estimates from twenty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 59% more than the market as a whole.
Average net gain in dividend and price was estimated at 77.22% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 24% above the market as a whole.
The Dividend Dogs Rule
The "dog" moniker was earned by stocks exhibiting three traits: (1) Paying reliable, repeating dividends, (2) their prices fell to where, and (3) yield (dividend/price) grew higher than their peers. So, the highest yielding stocks in any collection have become affectionately known as "dogs." More precisely, these are, in fact, best called, "underdogs."
43 For the Money
Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for FoFa/Ro stocks as of market closing prices 12/17/18 for 43 equities revealed the actionable conclusions discussed below.
See any Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins' book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analysts' price upside estimates expanded the stock universe to include popular growth equities, as desired.
Actionable Conclusions (11-20): Fo/Fa/Ro Top Equity, By Yield, Dynagas LNG Partners LP, Led 44 For November
FoFa/Ro sorted by yield calculated as of market close 12/17/18 represented all 11 Morningstar sectors among 43 equities.
Of the leading ten by yield, the top follower mention was one of two industrials representatives, Dynagas LNG Partners LP , which would have been tops by yield even if its dividend were cut in half (which could happen in January). The other industrial placed fourth, Capital Product Partners LP .
Finally, the lone Financial Services representative in the top ten, took the ninth place, Apollo Global Management LLC, to complete the top 10.
Actionable Conclusions: (21-30) Top 10 FoFa/Ro By Price Upsides Showed 43.68% To 140% Gains To December 2019
To quantify top dog rankings, analysts' mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analysts' median price target estimates became another tool to dig out bargains.
Analyst Targets Predicted A 29.54% Advantage For 5 Highest-Yield, Lowest-Priced Follower Favorite Stocks To December 2019
10 top FoFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.
As noted above, top 10 FoFa/Ro selected 12/17/18 showing the highest dividend yields represented: industrials (2), real estate (3), utilities (1), energy (3), and financial services (1) sectors.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of the Top 10 Highest-Yield Follower Favorite Dogs To (31) Deliver 91.48% Vs. (32) 70.62% Net Gains By All 10 To December 2019
$5k invested as $1k in each of the five lowest-priced stocks in the top 10 FoFaves kennel by yield were predicted by analyst one-year targets to deliver 29.54% more net gain than $5k invested in all 10. The second lowest priced FoFa/Ro top yield stock, Dynagas LNG Partners LP, was projected to deliver the best net gain of 169.77%.
The five lowest-priced FoFa/Ro top yield dogs for December 17 were: Capital Product Partners LP; Dynagas LNG Partners LP; Colony Capital Inc.; Orchid Island Capital Inc.; and Energy Transfer LP, with prices ranging from $2.20 to $13.19 per share.
Five higher-priced FoFa/Ro for December 17 were: AltaGas Ltd; The GEO Group Inc., Apollo Global Management LLC, AmeriGas Partners LP, and Buckeye Partners LP, whose prices ranged from $13.90 to $27.45.
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 analysts' 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 43 equities and funds discussed in this article were suggested by Seeking Alpha members, nicknamed: 50locations; 5ofDiamonds; AlieGee; amal.burroni; billgatesisevilus; birder; Bleed Blue Chip; buffalocave; Chris Lau; DisruptiveDave; Dividend Sheet; DREAM $; Drink DT; fatface; gymrat; Honeycomb888; huthutho; Jann Carpenter; joeblow_pe; kublackcoffee; Mike Slattery; New York; Parkourstar; Pattier20; phaedrus cj; rado403; S@m; simplman; TaiPan; Thermalsight; Tigertom73; TK8500; Whattaworld; VeloVulpes; and villanema.
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 FoFave 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: animalzfun.blogspot.com
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Disclosure: I am/we are long T, PFE, GE. 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.