90 Champions, Contenders, And Challengers Are Dividend Stars Per 2019 Wall Street Targets

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Includes: ANDX, APU, DKL, EQM, ET, GEO, GLOP, HMLP, HP, MMP, NEWM, NRZ, PM, SBRA, SRLP
by: Fredrik Arnold
Summary

Champion stocks average 39.7 annual dividend increases, contenders average 15.7, and challengers average 7.1. WallStar selections all show 0.01% or higher broker price-target upsides.

Top 30 broker January dividend ChamConChal (CCC) price target-upsides showed champions ranged 18.2-53.19%, contenders 23.79-55.15%, and challengers 24-50.97% as of 1/4/19.

30 top CCC yields for champion stocks ranged 3.15-6.72%, 30 contender yields ranged 4.24-14.07%, and 30 challenger yields were 7.2-15.27%.

$5k invested in the lowest-priced five January top-yield ten CCC stocks showed 5.54% more net gain than from $5k invested in all ten.

Source: YCharts

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

Five of ten top dividend-yielding CCC WallStar stocks (tinted gray in the chart above) were among the top ten gainers for the coming year based on analyst one-year target prices. So, this month, the dog strategy for the CCC WallStars graded out with 50% accuracy.

The following probable profit-generating trades were based on estimated dividend returns from $1,000 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 2018-2019 data points. Note: one-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to January 4, 2020, were:

Energy Transfer LP (ET) was projected to net $617.52 based on a mean target price estimate from eighteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 71% more than the market as a whole.

Sprague Resources LP (SRLP) was projected to net $590.33 based on dividends plus a mean target price estimate from two analysts plus dividend less broker fees. The Beta number showed this estimate subject to volatility 35% more than the market as a whole.

The GEO Group Inc. (GEO) was projected to net $506.56 based on dividends plus the median annual price estimate from three analysts less broker fees. The Beta number showed this estimate subject to volatility 45% more than the market as a whole.

Helmerich & Payne Inc. (HP) was projected to net $446.12 based on dividends plus the median target price estimate from twenty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 40% more than the market as a whole.

New Residential Investment (NRZ) was projected to net $419.19 based on a median target price estimate from nine analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 1% less than the market as a whole.

Philip Morris International (PM) was projected to net $419.19 based on dividends plus the median target price estimate from twenty analysts less broker fees. The Beta number showed this estimate subject to volatility 14% less than the market as a whole.

New Media Investment Group (NEWM) was projected to net $358.14 based on dividends plus a mean target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to volatility 11% more than the market as a whole.

Andeavor Logistics LP (ANDX) was projected to net $321.79 based on dividends plus a mean target price estimate calculated from fourteen analysts less broker fees. The Beta number showed this estimate subject to volatility 60% more than the market as a whole.

AmeriGas Partners LP (APU) was projected to net $301.38 based on dividends plus the median target price estimate from twenty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Magellan Midstream Partners LP (NYSE:MMP) was projected to net $294.00 based on dividends plus the median target price estimate from twenty-one analysts less broker fees. The Beta number showed this estimate subject to volatility 22% less than the market as a whole.

Average net gain in dividend and price was estimated at 42.92% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 20% more than the market as a whole.

Top 30 Champions, 30 Contenders, and 30 Challengers Represented All 11 Sectors In January

Results from drip investing listed as of 12/31/18 sorted by yield (dividend/price) calculated from here 1/4/19 for ninety stocks from all 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 work is now maintained by Justin Law. So, Champions, Contenders, and Challengers will live on: Champions are selected based on "25 or more straight years of higher dividends," Contenders show "10 to 24 straight years of higher dividends," and Challengers have "5 to 9 straight years of higher dividends." The list as of 12/31/18 provided the subjects for this article. Numeric calculations for the list were made as of 1/4/19 from YCharts data.

Source: quickanddirtytips.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 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.

Source: YCharts

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.

Source: YCharts

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.

Source: YCharts

Actionable Conclusion (11-20) Dividend Yield Metrics Selected 10 Top CCC Stocks

Source: YCharts

Top ten Champion/Contender/Challenger Dividend stocks selected 12/31/18 showing top yields as of 1/4/19 were one contender and nine challengers representing five sectors in the Morningstar eleven sector scheme: (1) energy [5 listed], (2) utilities [1 listed], (3) real estate [2 listed], (4) consumer cyclical [1 listed], (5) industrial [1 listed].

Energy firms claimed the first, fifth, sixth, ninth, and tenth positions: Sprague Resources[1], Andeavor Logistics LP [5], Delek Logistics Partners LP (DKL) [6], EQT Midstream Partners LP (EQM) [9], and GasLog Partners LP (GLOP) [10], all were Challengers.

The loner of Utilities, and the lone contender on the list placed second by yield, AmeriGas Partners LP [2]. Real estate dogs lodged in third and seventh places: New Residential Investment [3] and Sabra Health Care REIT Inc. (SBRA) [7].

Finally, the lone consumer cyclical sector representative placed fourth, New Media Investment Group Inc. [4] and the lone industrial placed eighth on the list, Hoegh LNG Partners LP (HMLP) [8], completed this list for January.

Actionable Conclusions (21-30): Ten CCC Stocks Showed 25.51% To 55.15% Upsides, While (31) None Showed Downsides To January 2020

Source: YCharts

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 5.54% Advantage For 5 Highest Yield, Lowest Priced CCC Stocks To November 2019

Ten 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.

Source: YCharts

As noted above, top ten Dividend CCC stocks selected 12/31/18 showing the highest dividend yields as of 1/4/19 accounting represented five sectors in the Morningstar eleven sector scheme.

Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Ten Top-Yield CCC (32) Delivering 36.2% Vs. (33) 34.3% Net Gains by All Ten by January 2020

Source: YCharts

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Champion kennel by yield were predicted by analyst one-year targets to deliver 6.8% more net gain than $5,000 invested as $.5k in each of all ten. The tenth lowest priced CCC dividend stock, EQT Midstream Partners LP showed the best analyst-augured net gain of 43.27%.

Source: YCharts

The five lowest-priced CCC dividend stocks of January 4 were: New Media Investment Group Inc., New Residential Investment, Hoegh LNG Partners, Sabra Health Care REIT Inc., and Sprague Resources LP, with prices ranging from $12.35 to $17.49.

Five higher-priced CCC dividend stocks for January 4 were: GasLog Partners LP, AmeriGas Partners LP, Delek Logistics Partners LP, Andeavor Logistics LP, and EQM Midstream Partners LP, whose prices ranged from $22.03 to $44.68.

That distinction between the five low-priced dividend dogs and the general field of ten 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 ChamConChal 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, and analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: quickanddirtytips.com

Disclosure: I am/we are long PFE, T, TJX. 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.