100 Dividend Achievers Flaunt March Yields, Gains, And Upsides

|
Includes: APU, BPL, CMP, EPD, ET, HEP, HP, LAZ, MMP, OHI, OMI, OXY, QCOM, SKT, T, TCP, VGR, WHG
by: Fredrik Arnold
Summary

Dividend Achiever stocks are distinguished by 10 or more straight years of higher dividends. Some 256 Achiever equities are balanced by sectors and capitalization. PFM is their tracking ETF.

Broker target-estimated March top ten Dividend Achiever net gains ranged 20%-49.28%, from MMP, T, CMP, QCOM, EPD, OXT, HP, APU, LAZ, and topped by ET, as calculated 3/8/19.

100 Top Dividend Achievers ranged in yield from 2.8% to 14.39%. Top ten, T, SKT, OHI, TCP, WHG, ET, BPL, HEP, APU, and VGR averaged 9.09% yield.

Top ten Achiever price upsides by MMP, T, CMP, EPD, QCOM, APU, OXY, HP, LAZ, and ET averaged 23.3% per 1yr. broker targets.

$5k invested in the lowest-priced five of the March top-yield ten Achiever stocks showed 41.68% more net gain than from a $5k investment in all ten.

Actionable Conclusions (1-10): Broker Targets Forecast 28% Average Net Gains For Ten Dividend Achievers To March 2020

Three of ten top dividend-yielding Achievers were verified as being among the top ten gainers for the coming year based on analyst 1-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.

Source: YCharts

The following probable profit-generating trades were identified by projections based on estimated dividend returns 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 March 8, 2020, were:

Energy Transfer LP (ET) was projected to net $492.82, based on dividends, plus mean target price estimates from nineteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 80% more than the market as a whole.

Lazard Ltd. (LAZ) was projected to net $354.34 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 60% more than the market as a whole.

AmeriGas Partners LP (APU) was projected to net $331.45, 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 8% more than the market as a whole.

Helmerich & Payne Inc. (HP) netted $268.39 based on dividends, plus the median target price estimates by thirty-seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 51% more than the market as a whole.

Occidental Petroleum Corp. (OXY) was projected to net $246.46, based on dividends, plus mean target price estimates from twenty-five analysts, less broker fees. The Beta number showed this estimate subject to volatility 17% less than the market as a whole.

Enterprise Products (EPD) was projected to net $246.12, based on the median of target price estimates by twenty-three analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 4% less than the market as a whole.

Qualcomm Inc. (QCOM) was projected to net $236.87, based on dividends, plus a mean target price estimate from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to volatility 23% more than the market as a whole.

Compass Minerals (CMP) was projected to net $218.44, based on dividends, plus mean target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to volatility 34% more than the market as a whole.

AT&T Inc. (T) was projected to net $206.30, based on dividends, plus the median of target price estimates from twenty-nine analysts, less broker fees. The Beta number showed this estimate subject to volatility 41% less than the market as a whole.

Magellan Midstream Partners (MMP) was projected to net $200.20, based on a median target price estimate from twenty-one analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 15% less than the market as a whole.

Average net gain in dividend and price was estimated at 28% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 27% more than the market as a whole.

Source: driverlayer.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 Dividend Achievers By Broker Targets For March

Source: YCharts

"The NASDAQ Dividend Achievers Index is made up of 256 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

Top 100 December Dividend Achievers By Yield

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 4.63%.

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

Top ten Dividend Achievers selected 3/8/19 by yield, represented six sectors in the Morningstar eleven sector scheme: (1) consumer defensive [1 listed]; (2) utilities [1 listed]; (3) energy [4 listed]; (4) financial services [1 listed]; (5) real estate [2 listed]; 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 ten placed second, AmeriGas Partners [2].

One of four energy representatives placed third, Holly Energy Partners (HEP) [4], to lead the Achiever top ten energy team, followed by three more energy issues in slots four, five, and seven Buckeye Partners (BPL)[4]; Energy Transfer LP [5], and TC Pipelines LP (TCP) [7].

The financial services representative placed sixth, Westwood Holdings Group Inc, (WHG), followed by two real estate stars in eighth and ninth, Omega Healthcare Investors Inc. (OMI) [8], Tanger Factory Outlet Centers Inc. (SKT) [9], and the communication services standout placed tenth, AT&T Inc. (T) [10], to complete the top ten March Dividend Achiever top stocks by yield.

Actionable Conclusions: (21-30) Ten Achiever Dogs Showed 24.45% To 56.25% Upsides, While (31) Six More Showed Losses Of -014%-5.76% By March 2020

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 41.68% Advantage For 5 Highest Yield, Lowest Priced Dividend Achiever Dogs To March 2020

Ten 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 3/8/19 and showing the highest dividend yields, represented six of the Morningstar eleven sector scheme.

Actionable Conclusions: (32) Analysts Predicted 5 Lowest-Priced Of Top Ten Highest-Yield Achiever Dogs Delivering 22.53% Vs. (33) 15.9% Net Gains By All Ten Come March 2020

Source: YCharts

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Achiever kennel by yield were predicted by analyst 1-year targets to deliver 6.85% more net gain than $5,000 invested as $.5k in each of all ten. The second lowest-priced Dividend Achiever, Energy Transfer LP, was found to deliver the best net gain at 49.28%.

Source: YCharts

The five lowest-priced dividend Achiever dogs as of March 8 were: Vector Group (VGR); Energy Transfer LP; Tanger Factory Outlet Centers Inc. (SKT); AmeriGas Partners; Holly Energy Partners (HEP); with prices ranging from $11.12 to $28.53.

Five higher-priced dividend Achievers for March 8 were: AT&T Inc. (T); Buckeye Partners LP (BPL); TC Pipelines LP (TCP); Omega Healthcare Investors Inc. (OHI); Westwood Holdings Group Inc. (WHG), whose prices ranged from $29.96 to $36.96.

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