66 Most Valuable Dividend Dogs For May By Yield, Upside, And Net Gains

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Includes: ADES, ARI, CIM, HRZN, LADR, NMFC, NYMT, OCSL, OFS, PNNT, RC, RWT, SNP, TPVG, TRTX, TSLX, WHF
by: Fredrik Arnold
Summary

YCharts grades 21,846 equities on a 10-point value scale. Scores of 10 historically outperformed the S&P 500 substantially. Only dividend stocks scoring 10 points made this most valuable list calculated 4/29/19.

Top ten broker target-estimated most valuable dividend dog net gains ranged 13.72-54.99% from Oaktree Specialty Lending, TPG Specialty Lending, TPG RE Finance Trust, Redwood Trust, Ladder Capital Corp., Pennant Park Investment, Ready Capital Corp., OFS Capital Corp., China Petroleum & Chemical, and top dog Advanced Emissions Solutions.

Broker target-estimated top ten price-upsides from TPG RE Finance Trust, TPG Specialty Lending, Oaktree Specialty Lending, Redwood Trust, Ladder Capital Corp., Ready Capital Corp., Pennant Park Investment, OFS Capital Corp., China Petroleum & Chemical, and Advanced Emissions Solutions, ranged 6.96%-47.78%.

Top 10 most valuable dividend dogs annual yields ranged 9.70% to 12.76% from New Mountain Finance, Apollo Commercial Real Estate Finance, WhiteHorse Finance, Pennant Park Investment, Horizon Technology Finance Corp., TriplePoint Venture Growth BDC Corp., Chimera Investment Corp., Ready Capital Corp., OFS Capital Corp., and top dog New York Mortgage Trust.

Analyst one-year targets indicated most valuable dividend stocks would accumulate 3.97% more gain from $5k invested in the lowest priced five than from $5K invested in all ten. Little stocks increased their lead in the  most valuable dividend dog pack.

Actionable Conclusions (1-10): Brokers Forecast 13.72% To 54.99% Top 10 Net Gains For May Most Valuable Dividend Dogs

Three of 10 top yield most valuable dividend dogs were identified as being among the top 10 net gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below.) So, our dogcatcher yield-based forecast for Top Value Dividend Dogs was graded by Wall St. brokers as 30% accurate.

(Source: YCharts)

Projections based on estimated dividend returns from $1000 invested in each of the high yield stocks and their aggregate 1-year analyst-estimated median target prices, as reported by YCharts, created the 2019-20 data points. Note: 1-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to May 1, 2020, were:

Advanced Emissions Solutions (ADES) was projected to net $549.93 based on target estimates from two analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 36% more than the market as a whole.

China Petroleum & Chemical Corp. (SNP) was projected to net $290.91 based on dividends plus median target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to risk 60% more than the market as a whole.

OFS Capital Corp. (OFS) was expected to net $237.83 based on the median of target price estimates from three analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 30% less than the market as a whole.

Ready Capital Corp. (RC) was projected to net $214.46 based on dividends plus a median of target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk 21% less than the market as a whole.

Pennant Park Investment (PNNT) was projected to net $213.02 based on target estimates from nine analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 22% more than the market as a whole.

Ladder Capital Corp. (LADR) was projected to net $163.50 based on dividends plus a mean target price estimate from six analysts, less broker fees. The Beta number showed this estimate subject to risk 4% less than the market as a whole.

Redwood Trust Inc. (RWT) netted $156.76 based on a median target price estimate from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 34% less than the market as a whole.

TPG RE Finance Trust (TRTX) was projected to net $146.29 based on the median of target estimates from seven analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 25% more than the market as a whole.

TPG Specialty Lending (TSLX) was projected to net $139.36, based on the median of target estimates from eleven analysts, plus annual dividend less broker fees. The Beta number showed this estimate subject to risk 37% less than the market as a whole.

Oaktree Specialty Lending Corp. (OCSL) was projected to net $137.17 based on dividends plus the median of target estimates from seven analysts, less broker fees. The Beta number showed this estimate subject to risk 42% less than the market as a whole.

The average net gain in dividend and price was estimated at 22.49% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 1% less than the market as a whole.

(Source: Telegraph.co.uk)

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".

40 Top Value Dividend Dogs By Broker Targets

(Source: YCharts)

This scale of broker-estimated upside (or downside) for stock prices provides a scale of market popularity. Note: Zero broker coverage or single broker coverage produced a zero score on the above scale. The broker upside score can be taken as an emotional component as opposed to the strictly monetary and objective dividend/price yield-driven report below.

66 Most Valuable Dividend Dogs By Yield

(Source: YCharts)

Actionable Conclusions (11-20): 10 Most Valuable Dividend Stocks By Yield

Top 10 Most Valuable Dividend stocks selected 4/29/19 by yield represented two of eleven Morningstar sectors.

The top-yielding stock was the first of four real estate representatives led by New York Mortgage Trust Inc. (NYMT) [1]. The other three real estate representatives placed third, fourth, and ninth, Ready Capital Corp. [3], Chimera Investment Corp. (CIM) [4], and Apollo Commercial Real Estate Finance Inc. (ARI) [9].

The financial sector had six most valuable dividend dog representatives in the second, fifth through eighth, and tenth places: OFS Capital Corp. [2], TriplePoint Venture Growth BDC Corp. (TPVG) [5], Horizon Technology Finance Corp. (HRZN) [6], Pennant Park Investment Corp. [7], WhiteHorse Finance Inc. (WHF) [8], and New Mountain Finance Corp. (NMFC) [10], to complete the most valuable dividend dogs top ten by yield for May.

Actionable Conclusions: (21-30) Top 10 Most Valuable Dividend Dogs Showed 6.96% To 47.78% Upsides To May 2020, With (31) Six Downsiders Ranging -2.45% to -7.41% In Estimated Losses

(Source: YCharts)

To quantify top dog rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high yield "dog" metrics, analyst mean price target estimates became yet another tool to dig out bargains.

Analysts Predicted A 3.97% Advantage For 5 Highest-Yield, Lowest-Priced Most Valuable Dividend Stocks Out of 10 To May 2020

Top 10 YCharts Most Valuable Dividend 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 10 YCharts Most Valuable Dividend Dogs represented just two of the eleven Morningstar sectors.

Actionable Conclusions: Analysts Projected 5 Lowest-Priced of the Top Ten Highest-Yield Most Valuable Dividend Stocks (32) To Fetch 12.95% Vs. (33) 12.46% Net Gains by All 10 by May 2020

(Source: YCharts)

$5000 invested as $1k in each of the five lowest-priced stocks in the top 10 most valuable dividend dogs by yield were predicted to produce 3.97% more gain than $5,000 invested as $.5k in all 10. The very highest-priced top value dividend stock, China Petroleum & Chemical Corp., was projected to deliver the best net gain of 20.09%.

(Source: YCharts)

The five lowest-price most valuable dividend dogs as of April 29 were New York Mortgage Trust Inc., Pennant Park Investment Corp., Horizon Technology Finance Corp., OFS Capital Corp., and New Mountain Finance Corp., with prices ranging from $6.27 to $14.02.

Five higher-priced most valuable dividend dogs as of April 29 were TriplePoint Venture Growth BDC Corp., WhiteHorse Finance Inc., Ready Capital Corp., Apollo Commercial Real Estate Finance Inc., and Chimera Investment Corp., whose prices ranged from $14.09 to $19.08.

The distinction between five low-priced dividend dogs and the general field of 10 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 20-80% accurate on the direction of change and just 0-20% 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.

The stocks listed above were suggested only as possible reference points for your most valuable dividend 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.com; YCharts; Yahoo Finance; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: Telegraph.co.uk

Disclosure: I am/we are long ADES. 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.