March's 111 Fair-Priced Growing Dividend Dogs By Yields, Gains And Upsides

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Includes: APU, CNSL, CSS, DCP, ENLC, ETM, F, HEP, PACW, PEI, RWT, SAR, SEP, SNH, TLRD
by: Fredrik Arnold
Summary

These 111 Fair-Priced Dividend Growth stocks are distinguished by 10 or more straight years of increasing dividends and single share prices less the annual dividends derived from $1k invested.

Broker target estimated March top 10 Fair-Priced Dividend net gains ranged 19-85.27% from F, RWT, DCP, APU, PACW, CNSL, SNH, ENLC, ETM, and topped by CLRD, as calculated 3/25/19.

30 top Fair-Priced Dividend Dog yield ranged from 6.52% to 14.93%. Top 10 - ENLC, TLRD, DCP, SAR, HEP, CSS, APU, SNH, PEI, and CNSL - averaged 11.41% yield and $9.03 per $1 dividend.

Top 10 Fair-Priced Dividend upsides from APU, CNSL, RWT, F, MVC, SNH, ENLC, PACW, ETM, and TLRD averaged 27.77% per one-year broker targets. Top Dow Dog, IBM, at $22.25 per $1 of dividend would rank 86th on this fair-priced list.

$5k invested in the lowest-priced five March Fair-Priced Dividend stocks showed 23.45% more net gain than from a $5k investment in all 10. These 111 Fair-Priced Dividend equities become more numerous when the dividend growth time limit is cut from ten to five or three years.

Top 30 Fair-Priced Dividends By March 2020

Yield (dividend/price) results from here March 25, verified by YCharts, for thirty stocks from nine of eleven Morningstar sectors revealed the actionable conclusions discussed below.

The master list of 111 Fair-Priced Dividend Growth stocks is distinguished by 10 or more straight years of increasing dividends with their single share prices below the annual dividends derived from $1k invested.

Source: YCharts

Actionable Conclusions (1-10): Broker Targets Forecast 35.37% Average Net Gains For 10 Dividend Fair- Priced Dividend Growers By March 2020

Six of ten top dividend-yielding Fair-Priced Dividend Growers were verified as being among the top ten gainers for the coming year based on analyst one-year target prices. (The name backgrounds are tinted in the list above). Thus, this month the dog strategy for the Fair-Priced Dividend Growers was graded by Wall St. Wizards as 60% accurate.

The following probable profit generating trades were identified by projections based on estimated dividend returns from $1,000 invested in each of the 30 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 25, 2020 were:

Tailored Brands, Inc. (TLRD) was projected to net $852.73, based on dividends, plus mean target price estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Entercom Communications (ETM) was projected to net $780.76, based on dividends, plus the median target price estimate from two analysts, less broker fees. The Beta number showed this estimate subject to volatility 9% more than the market as a whole.

EnLink Midstream LLC (ENLC) was projected to net $280.00, based on dividends, plus the median of target price estimates from fourteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.

Senior Housing Properties (SNH) was projected to net $269.12, based on dividends, plus a mean target price estimate from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 13% less than the market as a whole.

Consolidated Communications (CNSL) was projected to net $266.08, based on a mean target price estimate from five analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 7% more than the market as a whole.

PacWest Bancorp (PACW) was projected to net $259.98, based on dividends, plus a mean target price estimate from twelve analysts, less broker fees. The Beta number showed this estimate subject to volatility 55% more than the market as a whole.

AmeriGas Partners LP (APU) was projected to net $240.00, based on dividends, plus a mean target price estimate from eight analysts, less broker fees. The Beta number showed this estimate subject to volatility 8% more than the market as a whole.

DCP Midstream LP (DCP) was projected to net $205.23, based on dividends, plus a median target price estimate from sixteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 149% more than the market as a whole.

Redwood Trust (RWT) netted $192.89 based on dividends, plus mean target price estimates by five analysts, less broker fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.

Ford Motor Co. (F) was projected to net $190.34, based on dividends, plus mean target price estimates from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to volatility 3% more than the market as a whole.

Average net gain in dividend and price was estimated at 35.37% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 29% more than the market as a whole.

Source: Pethelpful.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 111 March Fair-Priced Dividend Growers

Source: YCharts

Fair-Priced Dividend Growers for this article were selected based on price paid per $1 of dividend. This Base list of 111 equities (showing lower than $24.75 cost per dividend dollar) was reduced to 30 when the dollar limit was set at $15.35.

Actionable Conclusions (11-20): Dog Metrics Singled Out 10 Top Fair-Priced Dividend Growers

Top 10 Fair-Priced Dividend Growers selected 3/25/19 by price per dividend dollar represented six sectors in the Morningstar eleven sector scheme: (1) communication services [1 listed]; (2) real estate [2 listed]; (3) utilities [1 listed]; (4) consumer cyclical [2 listed]; (5) energy [3 listed]; (6) financial services [1 listed].

Top Fair-Priced Dividend Grower stock by price per dividend dollar was the lone communication services sector equity, Consolidated Communications Holdings Inc. (CNSL) [1]. Two real estate representatives placed second and third: Pennsylvania Real Estate Investment Trust (PEI) [2], and Senior Housing Properties Trust (SNH) [3].

A lone utilities entity placed fourth, AmeriGas Partners LP (APU) [4], while two consumer cyclical firms in the top ten mix placed fifth and ninth - CSS Industries Inc (CSS) [5], and Tailored Brands Inc. (TLRD) [9]. The lone financial services firm in the top ten placed seventh, Saratoga Investment Corp. (SAR) [7].

Finally, three energy representatives placed sixth, eighth, and tenth. They are Holly Energy Partners (HEP) [6], DCP Midstream LP (DCP) [8], and EnLink Midstream LLC (ENLC) [10] to complete the top 10 March Fair-Priced Dividend Grower stocks by yield.

Actionable Conclusions: (21-30) Ten Fair-Priced Dividend Grower Dogs Showed 13.33% To 77.92% Upsides, While (31) Three Below Showed Losses Of -0.61% And -4.73% Come 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 Estimated A 23.45% Advantage For Five Highest-Yield, Lowest-Priced, Fair-Priced Dividend Growers To March 2020

Fair-Priced Dividend Grower dogs were culled by yield for this update. Yield (dividend / price) results verified by YCharts did the ranking.

Source: YCharts

As noted above, top ten Fair-Priced Dividend Grower dogs selected 3/25/18 and showing the highest dividend yields represented six sectors in the Morningstar eleven sector scheme.

Actionable Conclusions: (33) Analysts Predicted Five Lowest Priced Of The Top 10 Highest-Yield Fair-Priced Dividend Grower Dogs Delivering 32.57% Vs. (34) 26.39% Net Gains from All 10 by March 2020

Source: YCharts

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Fair-Priced Dividend Grower kennel by yield were predicted by analyst one-year targets to deliver 23.45% more net gain than $5,000 invested as $.5k in each of all ten. The third lowest-priced Fair-Priced Dividend Grower, Tailored Brands Inc., was found to deliver the best estimated net gain at 85.27%.

Source: YCharts

The five lowest-priced Fair-Priced Dividend Grower dogs as of March 25 were: Pennsylvania Real Estate Investment Trust, Tailored Brands, Consolidated Communications Holdings, Senior Housing Properties Trust, with prices ranging from $6.15 to $11.76.

Five higher-priced Fair-Priced Dividend Growers for March 25 were EnLink Midstream LLC, Saratoga Investment Corp, Holly Energy Partners LP, Spectra Energy Partners (SEP); AmeriGas Partners, and DCP Midstream LP, whose prices ranged from $12.00 to $32.50.

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.

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.

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 Yahoo Finance. Dog photo: tvoydosug.com