Your Top 50 Good Strong Underdogs By Yield And Price Gain

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Includes: ANDX, CHS, DKL, EQM, GEO, GLOP, HMLP, INN, NEWM, NRZ, PBFX, SBRA, SIX, SRLP, WLKP, WPP
by: Fredrik Arnold
Summary

Good strong underdogs are companies that have increased dividends yearly for 5-9 consecutive years and whose annual dividend from $1K invested exceeds the single share price of their stock.

82 good strong underdog stocks represent nine of the eleven Morningstar sectors. Broker target-top-ten net gains ranged 21-48.16%, topped by WPP PLC 3/22/19.

By yield, Sprague Resources topped all good strong underdogs. Top ten yields from PBFX, SBRA, GLOP, DKL, GEO, EQM, ANDX, NRZ, NEWM, and SRLP averaged 11.2%.

Good strong underdogs top ten firms by broker target price upsides, INN, EQM, MPLX, GLOP, SRLP, WLKP, CHS, GEO, SIX, and WPP, averaged 22.92% in estimated gains.

$5k invested in the lowest-priced five March top-yield good strong underdogs showed 3.20% more net gain than from $5k invested in all ten. Low price little stocks lead the good strong underdogs.

Actionable Conclusions (1-10): Brokers Predicted 21% To 48.16% Net Gains To March 2020

Five of the ten top good strong underdogs by yield were verified as being among the top ten gainers for the coming year based on analyst one-year target prices. They are tinted gray in the chart below. Thus, our yield-based forecast for good strong underdogs graded by Wall Street wizards was 50% accurate.

Source: YCharts

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, created the 2019-2020 data points. Note: one-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to March 22, 2019, were:

WPP PLC (WPP) was projected to net $481.56 based on dividends plus a mean target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to volatility equal to the market as a whole.

Hoegh LNG Partners (HMLP) was projected to net $340.23 based on a median target price estimate from eight analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.

Six Flags Entertainment (SIX) was projected to net $333.66 based on dividends plus a mean target price estimate from twelve analysts less broker fees. The Beta number showed this estimate subject to volatility 16% more than the market as a whole.

The GEO Group, Inc. (GEO) was projected to net $316.60 based on dividends plus a mean target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to volatility 50% more than the market as a whole.

Chico's FAS, Inc. (CHS) was projected to net $292.06 based on dividends plus median target price estimates from nine analysts less broker fees. The Beta number showed this estimate subject to volatility 59% less than the market as a whole.

Westlake Chemical Partners (WLKP) was projected to net $282.84 based on a median target estimate from six analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 38% less than the market as a whole.

GasLog Partners LP (GLOP) was projected to net $258.03 based on a median target price estimate from thirteen analysts plus the estimated annual dividend less broker fees. The Beta number showed this estimate subject to volatility 24% more than the market as a whole.

New Residential Investment (NRZ) was projected to net $251.86 based on target price estimates from nine analysts plus annual dividend less broker fees. The Beta number showed this estimate subject to volatility 11% more than the market as a whole.

EQM Midstream Partners LP (EQM) netted $251.82 based on a median target price estimate from twelve analysts plus dividends less broker fees. The Beta number showed this estimate subject to volatility 10% more than the market as a whole.

Summit Hotel Properties (INN) was projected to net $210.21 based on dividends plus a median target estimate from six brokers less transaction fees. The Beta number showed this estimate subject to volatility 45% more than the market as a whole.

The average net gain in dividend and price was estimated to be 30.2% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility of 5% more than the market as a whole.

Source: lightheadedbeds.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", even if they are "Good & Strong."

50 Good Strong Underdogs By Broker Targets

Source: YCharts

This scale of broker estimated upside (or downside) for stock prices provides a scale of market popularity. Note: no broker coverage or 1 broker coverage produced a zero score on the above scale. It can be taken as an emotional component as opposed to the strictly monetary and objective dividend/price yield-driven report below.

50 Good Strong Underdogs By Yield

Source: YCharts

Actionable Conclusions (11-20): 10 Top Good Strong Underdogs By Yield

Top ten good strong underdogs stocks selected 3/22/19 by yield represented three of eleven Morningstar sectors. Top yielding stock, Sprague Resources LP (SRLP) [1] was the first of six energy sector firms in the top ten. The other five energy firms were placed fourth, fifth, seventh, eighth, and tenth: Andeavor Logistics LP (ANDX) [4], EQM Midstream Partners [5], Delek Logistics Partner (DKL) [7], GasLog Partners LP [8], and PBF Logistics LP (PBFX) [10].

One consumer cyclical sector stock was placed second, New Media Investment Group Inc. (NEWM) [2]. Finally, three real estate sector representatives were placed third, sixth, and ninth; New Residential Investment Corp. [3], The GEO Group [6], and Sabra Health Care REIT Inc. (SBRA) [9], to complete the good strong underdogs top ten by yield for March.

Source: YCharts

Actionable Conclusions: (21-30) Ten Good Strong Underdogs Showed 16.47% To 42.83% Upsides To March 2020; (31) Downsides Projected From Three Losers Ranged -0.16%. To -4.13%.

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 median price target estimates became another tool to dig out bargains.

Analysts Estimated A 3.20% Advantage For 5 Highest Yield, Lowest Priced Good Strong Underdogs To March 2020

Ten top good strong underdogs 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 good strong underdogs selected 3/22/19 showing the highest dividend yields represented three of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Projected The 5 Lowest-Priced of the Top Ten Highest-Yield Good Strong Underdogs (32) Delivering 21.76% Vs. (33) 21.09% 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 good strong underdogs by yield were predicted by analyst one-year targets to deliver 3.20% more gain than $5,000 invested as $.5k in all ten. The third lowest priced good strong underdogs top yield stock, Sprague Resources LP, was projected to deliver the best net gain of 33.49%.

Source: YCharts

The five lowest-priced top yield good strong underdogs for March 22 were: New Media Investment Group Inc., New Residential Investment Corp., Sprague Resources LP, Sabra Health Care REIT Inc., and The GEO Group Inc. with prices ranging from $11.47 to $18.99

Five higher-priced good strong underdogs as of March 22 were: PBF Logistics LP, GasLog Partners LP, Delek Logistics Partners LP, Andeavor Logistics LP, and EQM Midstream Partners LP with prices ranging from $21.13 to $43.89.

This 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 good strong underdogs stock purchase or sale research process. These were not recommendations.

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.

Additional disclosure: 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: lightheadedbeds.com