Here Are 50 Top S&P 500 Stocks For Yield, Gains, And Upside In February

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Includes: ABBV, AVGO, CTL, CVX, D, EIX, IRM, KMI, M, OKE, PGR, PPL, QCOM, SPG, STX, VTR, VZ
by: Fredrik Arnold
Summary

"The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization."

Broker target-estimated February top ten net gains ranged 11.13%-48.56% topped by CTL 2/1/19. The master list was pre-screened to include firms with net annual returns better than -13%.

50 Top S&P 500 index stocks ranged in estimated annual yield QCOM, VTR, D, PPL, OKE, ABBV, STX, M, IRM, and CTL averaged 6.33%.

S&P 500 index top ten firms by broker target-price upsides, VZ, SPG, AVGO, PGR, CVX, KMI, EIX, ABBV, QCOM, and CTL, averaged 17.73%.

$5k invested in the lowest-priced five February top-yield S&P 500 dividend stocks showed 1.76% LESS net-gain than from $5k invested in all ten. Big high-price S&P 500 dogs took over.

Source: YCharts.com

Actionable Conclusions (1-10): Analysts Estimated 11.13% To 48.56% Net Gains For Ten S&P 500 Dogs To February 2020

Three of ten top S&P 500 dividend stocks by yield were among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart above). Thus, this yield-based forecast for S&P 500 dogs was graded by Wall St. Wizards as 30% accurate.

Projections were based on estimated dividends from $1,000 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. Ten probable profit-generating trades projected to February 1, 2020, were:

CenturyLink Inc. (CTL) was projected to net $485.57, based on a median of target price estimates from sixteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.

Qualcomm Inc. (QCOM) was projected to net $356.34, based on a median of target price estimates from twenty-five analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 21% more than the market as a whole.

AbbVie Inc. (ABBV) netted $209.57 based on a median estimate from seventeen analysts, plus dividends. The Beta number showed this estimate subject to volatility, 18% more than the market as a whole.

Edison International (EIX) was projected to net $194.88, based on dividends, plus a mean target price estimate from eighteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 3% opposite the market as a whole.

Kinder Morgan (KMI) was projected to net $187.63, based on a median target estimates from twenty-one analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.

Chevron Corp. (CVX) was projected to net $170.84, based on dividends, plus median target price estimates from twenty-six analysts, less broker fees. The Beta number showed this estimate subject to volatility 2% more than the market as a whole.

Progressive Corp. (PGR) was projected to net $144.35, based on the median of target price estimates from twenty analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 25% less than the market as a whole.

Broadcom Inc. (AVGO) was projected to net $125.76, based on dividends, plus a mean target price estimate from thirty-seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 28% less than the market as a whole.

Simon Property Group Inc. (SPG) was projected to net $125.58, based on dividends, plus the median of target price estimates from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 42% less than the market as a whole.

Verizon Communications (VZ) was projected to net $111.26 based on dividends, plus a median target estimate from thirty brokers, less transaction fees. The Beta number showed this estimate subject to volatility 52% less than the market as a whole.

The average net gain in dividend and price was estimated at 26.4% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average volatility 23% less than the market as a whole.

Source: YCharts.com

Actionable Conclusions (11): (Bear Alert) Analysts Predicted One S&P 500 Top Yielder To Show A 3.8% Loss to February 2020

The probable losing trade revealed by Y-Charts for 2020 was:

Ventas Inc. (VTR) projected a loss of $37.96 based on dividend and a median of the target price estimates from twenty-one analysts including broker fees. The Beta number showed this estimate subject to volatility 66% less than the market as a whole.

Source: homemydesign.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".

50 Top S&P 500 Dividend Stocks By Yield

Source: us.spindices/YCharts

Actionable Conclusions (12-21): 10 Top S&P 500 Dividend Stocks By Yield

Top ten S&P 500 stocks selected 2/1/19 by yield represented eight of eleven Morningstar sectors. First place was claimed by a lone communication services sector representative, CenturyLink Inc. (CTL) [1]. In second place was the industrials sector rep, Iron Mountain Inc. (IRM) [2]. One from the consumer cyclical sector placed third, Macy's Inc. (M) [3].

Two technology pups claimed fourth and tenth places, Seagate Technology PLC (STX) [4], and Qualcomm Inc. (QCOM) [10]. A lone healthcare representative placed fifth, AbbVie Inc. (ABBV) [5]. That one was followed by the energy representative, in sixth place, ONEOK Inc. (OKE) [6].

Two utilities representatives placed seventh and eighth, PPL Corp. (PPL) [7], and Dominion Energy Inc (D) [8]. Finally, a lone real estate sector representative placed ninth, Ventas Inc. (VTR) [9], to complete the S&P 500 top ten by yield for February.

Actionable Conclusions: (22-31) Top Ten S&P 500 Dogs Showed 8.71% To 36.4% Upsides To February 2019; (32) Eight Lowly Downsiders Ranged -0.58% To -6.80%.

Source: YCharts.com

To quantify top dog rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst mean price target estimates became another tool to dig out bargains.

Analysts Forecast A 1.76% Disadvantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To February 2020

Ten top S&P 500 dividend dogs were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking. The master list was pre-screened to only include firms with net returns greater than -13%.

Source: YCharts.com

As noted above, top ten S&P 500 dividend dogs selected 2/1/19 showing the highest dividend yields represented eight of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of the Top Ten Highest-Yield S&P 500 Dogs (32) Delivering 14.13% Vs. (33) 14.39% Net Gains by All Ten Come February 2020

Source: YCharts.com

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend S&P 500 kennel by yield were predicted by analyst 1-year targets to deliver 1.56% LESS gain than $5,000 invested as $.5k in all ten. The very lowest priced selection, CenturyLink Inc., was projected to deliver the best net gain of 48.56%.

Source: YCharts.com

The five lowest-priced top-yield S&P 500 dividend dogs for February 1 were: CenturyLink Inc., Macy's Inc.; PPL Corp.; Iron Mountain Inc.; Seagate Technology PLC, with prices ranging from $15.25 to $45.26.

Five higher-priced S&P 500 dividend dogs for February 1 were: Qualcomm Inc.; Ventas Inc.; ONEOK Inc.; Dominion Energy Inc.; AbbVie Inc., whose prices ranged from $49.61 to $80.50.

The distinction between 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.

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 IndexArb; YCharts; Yahoo Finance; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: homemydesign.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.