54 Sector Major Leaders In March: On To 2020

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Includes: ABBV, BP, BPR, C, CMCSA, CSCO, D, DWDP, KHC, NGG, NTR, PM, RIO, T, TEF, VTR, WFC
by: Fredrik Arnold
Summary

YCharts 'Sector Majors' are by market capitalization. Top caps by sector by yield are NGG, IBM, BPR, UPS, ABBV, WFC, BP, PM, HD, & T, averaging 5.25% yields 3/8/20.

This article features sector majors. As leaders by capitalization, they are already at the top, yet some have surprisingly healthy dividends and yields. Next month, back to basic yield metrics.

54 Sector Major stocks ranged in estimated annual yields from 2.08% to 7.42%. Top ten by yield, D, KHC, VTR, PM, RIO, ABBV, BP, T, BPR, & NGG averaged 5.78%.

Ten top Sector Majors by net  gains, WFC, CMCSA, NTRN, T, DWDP, KHC, ABBV, QCOM, CSCO, & leader C, averaged 19.12% per broker estimates.

Hypothetically, $5k invested in the lowest-priced five top-yield ten Sector Majors showed 56.04% LESS net gain than from $5k invested in all ten. High priced bigger dogs led the Sector Majors in March.

Actionable Conclusions (1-10): Brokers Projected 14.79% To 21.64% Net Gains For Top Ten Sector Majors To March 2020

Three of ten top dividend yield Sector Majors were verified as being among the top ten net gainers for the coming year based on analyst 1-year target prices. (They're tinted gray in the chart below). Thus, the yield-based forecast for the Sector Majors as graded by Wall St. wizards was 30% accurate.

Source: YCharts

Projections based on estimated dividend returns from $1,000 invested in the highest yielding stocks and aggregate one-year analyst mean target prices as reported by YCharts produced the 2019-20 data. Note: one-year target prices from one analyst were not applied (n/a). Ten probable profit-generating trades to March 2020 were:

Citigroup Inc. (C) was projected to net $216.43 based on dividends, plus a median target price estimate from twenty-eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 68% above the market as a whole.

Cisco Systems Inc. (CSCO) was projected to net $213.73, based on a median target price estimate from eleven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 15% above the market as a whole.

Qualcomm Inc. (NASDAQ:QCOM) was projected to net $213.51, based on dividends, plus median target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to volatility 23% above the market as a whole.

AbbVie Inc. (ABBV) netted $212.02 based on dividends, plus a median target price estimate from eighteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 17% more than the market as a whole.

The Kraft Heinz Co. (KHC) was projected to net $203.73, based on a median target price estimate from twenty-two analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 28% under the market as a whole.

DowDuPont Inc. (DWDP) was projected to net $191.81 based on dividends, plus a median target price estimate from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to volatility 29% over the market as a whole.

AT&T Inc. (T) was projected to net $185.73, based on dividends, plus upside 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.

Nutrien Ltd. (NTR) was projected to net $172.35, based on dividends, plus upside estimates from twenty-five analysts, less broker fees. A Beta number was not available for NTRN.

Comcast Corp. (CMCSA) netted $154.96 based on dividends, plus a median target price estimate from thirty-one analysts, less broker fees. The Beta number showed this estimate subject to volatility 10% over the market as a whole.

Wells Fargo & Co. (WFC) was projected to net $147.94, based on target price estimates from thirty analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 12% more than the market as a whole.

The average net gain (dividend and price less broker fees) was estimated at 19.12% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 1% more than the market as a whole.

Source: games.espn.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".

54 Top Sector Majors In Reverse Alphabetical Order By Sector by Yield

Source: YCharts

Actionable Conclusions (11-20) 54 Top Dividend Sector Majors Ranked By Yield

Source: YCharts

Top ten Sector Majors selected 3/8/19 by yield represented nine of eleven Morningstar sectors. The top and bottom yielding majors represented utilities, National Grid PLC (NGG) [1] and Dominion Energy Inc. (D) [10].

Two real estate representatives found themselves in second and eighth places, Brookfield Property REIT Inc. (BPR) [2] and Ventas Inc. (VTR) [8].

Third place was claimed by the communication services major duomo, AT&T, Inc. [3]. Fourth place went to the energy sector representative, BP PLC (BP) [4], and fifth was claimed by the Healthcare Major, AbbVie [5].

Sixth place by yield went to a basic materials leader, Rio Tinto PLC (RIO) [6].

Two consumer defensive majors claimed seventh and ninth places, Philip Morris (PM) [7] and The Kraft Heinz Co. [9] to complete the top ten March Sector Majors by yield.

Actionable Conclusions: (21) Eleven Sector Majors Showed 14.86% To 23.11% Price Upsides To March 2020; (22) Not One Downside in the top 30.

Source: YCharts

To quantify top stock 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 Estimated A 56.04% Disadvantage For 5 Highest Yield, Lowest Priced Of Top Ten Sector Majors To March 2020

Ten top sector leaders were culled by yield for this update. Yield (dividend / price) results verified by YCharts did the ranking.

Source: YCharts

As noted above, top ten Sector Major dogs selected 3/8/19 showing the highest dividend yields represented nine of eleven sectors constituting the Morningstar protocol.

Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Out Of Ten Highest-Yield Sector Majors (23) Delivering 3.05% Vs. (24) 6.94% Net Gains by All Ten by March 2020

Source: YCharts

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Sector Majors kennel by yield were predicted by analyst 1-year targets to deliver 56.04% LESS gain than $5,000 invested as $.5k in all of those ten. The sixth lowest priced, National Grid PLC, was projected to deliver the best net gain of 21.37%.

Source: YCharts

The five lowest-priced sector majors as of March 8 were: Brookfield Property REIT Inc., AT&T Inc.; The Kraft Heinz Co.; BP PLC; Rio Tinto PLC, with prices ranging from $19.26 to $54.66.

Five higher-priced sector majors for March 8 were: National Grid PLC, Ventas Inc., Dominion Energy Inc.; AbbVie Inc.; Philip Morris International Inc., whose prices ranged from $57.22 to $87.45.

The distinction between five low-priced dividend stocks 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 www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in YahooFinance. Dog photo: games.espn.com

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