69 February 10%+ Dividend Yield WallStars Have Heart

Feb. 08, 2019 3:45 PM ETAAIC, AVH, ICMB, CNSL, LUMN, GARS, JP, LKSDQ, MAXR, MMLP, NGL, SEMG, SMLP, FCRD, TEO, VGR4 Comments4 Likes

Summary

  • WallStars all show positive broker target price upsides. 69 stocks displayed 10%+ forward yield, $4.00+ prices, and $100M+ market caps 2/6/19. Yields above 11.75% winnowed the list to 30.
  • WallStar target-estimated February top-ten net-gain estimates ranged 38%-122.56% for SMLP, NGL, SEMG, AVH; CMFN, TEO, GARS, CTL; LKSD, and top pick, MAXR.
  • 30 Top stocks ranged in estimated annual yield from 11.75%-18.29%. Top ten, VGR; CNSL, JP, CTL, MMLP; AVH, TCRD, AI, SMLP, and top pick, MAXR. averaged 15.85% yield.
  • Top-ten firms by WallStar target-price upsides USAC, NGL, AVH, SEMG, CMFN, TEO, CTL, GARS, LKSD, and top stock, MAXR averaged a 42.76% estimated price gain.
  • $5k invested 2/6/18 in the lowest-priced five 10%+ top-yield dividend stocks showed 19.41% more net-gain than from $5k in all ten.  The low-price smaller WallStars dominated February's 10%+yield pack.
  • This idea was discussed in more depth with members of my private investing community, The Dividend Dog Catcher. Start your free trial today »

Actionable Conclusions (1-10): Brokers Calculate 38.95% To 122.56% Net Gains For Ten 10%+ Yield Stocks By February, 2020

Four of ten top 10%+Yield WallStars were among the top ten gainers for the coming year (based on analyst 1-year targets). So, this forecast for 10%+ Yields, as graded by Wall St. Brokers, was 40% accurate.

Source: YCharts

Projections based on dividends from $1000 invested in the highest yielding stocks and aggregate one year analyst median target prices of those stocks, as reported by YCharts, created the 2020 data points. Note: one-year target prices from single analysts were not applied (n/a). Ten probable profit-generating trades to February, 2020 were:

Maxar Technologies (MAXR) was projected to net $1,225.64 based on dividends, plus the median of target estimates from eight brokers, less broker fees. The Beta number showed this estimate subject to volatility 15% under the market as a whole.

LSC Communications Inc (LKSD) netted $703.84 based on the median of target price estimates from three analysts, plus dividends less broker fees. A Beta number was not avialable for LKSD.

CenturyLink Inc (CTL) was projected to net $545.16, based on a median target price estimate 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.

Garrison Capital Inc (GARS) was projected to net $529.33, based on dividends, plus the median of target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 33% less than the market as a whole.

Telecom Argentina SA (TEO) was projected to net $484.12, based on target price estimates from ten analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 7% under the market as a whole.

CM Finance Inc (CMFN) was projected to net $422.91, based on the median of target price estimates from two analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 47% more than the market as a whole.

Avianca Holdings SA (AVH) was projected to net $415.99, based on a median target price estimate from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 2% more than the market as a whole.

Semgroup Corp (SEMG) was projected to net $414.19 based the median of target price estimates from eleven analysts, plus the estimated dividends, less broker fees. The Beta number showed this estimate subject to volatility 88% over the market as a whole.

NGL Energy Partners LP (NGL) was projected to net $380.18 based the median of target price estimates from eight analysts, plus the estimated dividends, less broker fees. The Beta number showed this estimate subject to volatility 26% over the market as a whole.

Summit Midstream Partners LP (SMLP) was projected to net $380.00, based on dividends, plus the median of target price estimates from ten analysts, less broker fees. The Beta number showed this estimate subject to volatility 90% over the market as a whole.

The average net gain in dividend and price was estimated at 55% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 15% more than the market as a whole.

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".

69 10%+Yield WallStars By Price Target Upsides

Source:YCharts

69 10%+ Yield WallStars By Yield

Source:YCharts

Actionable Conclusions (11-20): Ten Top 10%+ Yield WallStars By Sector

Top ten 10%+ Yield WallStars selected 2/6/19 by yield represented six of eleven Morningstar sectors.

Top stock on the list was one in the technology sector, Maxar Technologies Inc (MAXR) [1]. Two energy stocks followed in second and sixth places, Summit Midstream Partners LP (SMLP) [2], and Martin Midstream Partners LP (MMLP) [6].

A pair of financial services representatives placed third and fourth, Arlington Asset Investment Corp (AI) [3], and THL Credit Inc (TCRD) [4] and a third financial placed eighth, Jupai Holdings Ltd (JP) [8].

One in the industrials sector placed fifth, Avianca Holdings SA (AVH) [5]. Then, two from communication services placed seventh and ninth, CenturyLink Inc (CTL) [7], and Consolidated Communications Holdings Inc. (CNSL) [9]. Finally, a lone consumer defensive sector representative placed ninth, Vector Group Ltd (VGR) [9], to complete the 10%+ Yield WallStar top ten for February 2019-20.

Actionable Conclusions: (21) Top Ten 10%+ Yield WallStars Showed 24.24% To 106.27% Upsides To February, 2020; (22) Lowest Downside Were Four at 0%.

Source:YCharts

To quantify top yield rankings, analyst mean price target estimates provided 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 Cast A 32.36% Advantage For 5 Highest Yield, Lowest Priced 10%+ Yield WallStars To February, 2020

Ten top 10%+ Yield WallStars were culled by yield for this monthly update. Yield (dividend/price) results verified by YahooFinance did the ranking.

Source:YCharts

As noted above, top ten 10%+ Yield WallStars selected 2/6/19 showing the highest dividend yields represented six of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Top Ten Highest-Yield 10%+WallStars (25) Delivering 46.44% Vs. (26) 38.89% Net Gains From All Ten By February, 2020

Source:YCharts

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten 10%+ Yield WallStars collection was expected by analyst 1-year targets to deliver 32.36% more net gain than $5,000 invested as $.5k in all ten. The third lowest priced 10%+ top yield WallStar, Maxar Technologies Inc (MAXR), was projected by analysts to deliver the best net gain of 122.56%.

Source:YCharts

The five lowest-priced top 10%+ Yield stocks as of February 6 were: Jupai Holdings Ltd (JP); Avianca Holdings SA (AVH); Maxar Technologies Inc (MAXR); THL Credit Inc (TCRD); Arlington Asset Investment Co (AI), with prices ranging from $4.05 to $8.78.

Five higher-priced 10%+ Dividend WallStars from February 6 were: Consolidated Communications Holdings Inc (CNSL); Vector Group Ltd (VGR); Summit Midstream Partners LP (SMLP); Martin Midstream Partners LP (MMLP); CenturyLink Inc (CTL), whose prices ranged from $10.61 to $14.35.

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.

Stocks listed above were suggested only as possible reference points for your 10%+ Yield WallStar 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 YahooFinance. Dog photo: reneelouise21.wordpress.com

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This article was written by

Fredrik Arnold profile picture
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Simple, straightforward 7-step analysis that finds lucrative income stocks.
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators. These are essential tools for catching the most valuable dividend dogs. My dividend dogcatcher premium site in the Seeking Alpha Marketplace shows annual real-time trading results since 2015.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

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