Achievers' May Yields Blossom With Gains And Upside

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Includes: CVS, CVX, D, EIX, EPD, HEP, MCY, NHI, OHI, OKE, ORI, PPL, QCOM, UBA, UVV, WPC
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 May top 10 Dividend Achiever net gains ranged 9.49%-35.08% from OKE, ORI, NHI, OHI, HEP, EIX, QCOM, CVX, and topped by CVS, as calculated 4/30/19.

101 Top Dividend Achievers ranged in yield from 2.01% to 9.86%. Top 10 - D, UBA, OKE, WPC,PPL, NHI, UVV, EPD, OHI and HEP - averaged 5.99% yield.

Top 10 Achiever price upsides by NHI, OKE, MCY, DLR, ORI, UVV, TGT, EIX, CVX, and CVS averaged 11.45% per one-year broker targets.

$5k invested in the lowest-priced five of the May top-yield 10 Achiever stocks showed 4.27% more net gain than from a $5k investment in all 10.

Actionable Conclusions (1-10): Broker Targets Forecast 14.78% Average Net Gains For Ten Dividend Achievers To May 2020

Four 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 below). Thus, this month the dog strategy for the Achievers was graded by Wall St. watchers as 40% accurate.

source: YCharts

The following probable profit generating trades were identified by projections based on estimated dividend returns from $1000 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 April 30, 2020 were:

CVS Health Corp (CVS) was projected to net $350.82, based on dividends, plus mean target price estimates from twenty-seven analysts, less broker fees. The Beta number showed this estimate subject to risk 7% less than the market as a whole.

Chevron Corp (CVX) was projected to net $202.35, based on dividends, plus the median of target price estimates from eighteen analysts, less broker fees. The Beta number showed this estimate subject to risk equal to the market as a whole.

Qualcomm Inc (QCOM) was projected to net $157.48, based on dividends, plus a median of target price estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to risk 24% more than the market as a whole.

Edison International (EIX) netted $151.19 based on dividends, plus the median target price estimates by seventeen analysts, less broker fees. The Beta number showed this estimate subject to risk 5% opposite the market as a whole.

Holly Energy Partners LP (HEP) was projected to net $114.71, based on dividends, plus the median pf target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk 22% less than the market as a whole.

Mercury General Corp (MCY) was projected to net $105.87 based on dividends, plus the median of target price estimates from three analysts, less broker fees. The Beta number risk 74% less than the market as a whole.

Omega Healthcare Investors (OHI) was projected to net $101.62, based on the median of target price estimates by ten analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk 54% less than the market as a whole.

National Health Investors (NHI) was projected to net $99.66, based on dividends, plus the median of target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to risk 52% less than the market as a whole.

Old Republic International Corp (ORI) was projected to net $99.15, based on dividends, plus mean target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to risk 8% less than the market as a whole.

ONEOK Inc (OKE) was projected to net $94.93, based on a median target price estimate from twenty-two analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk 20% more than the market as a whole.

Average net gain in dividend and price was estimated at 14.78% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 27% less than the market as a whole.

source: intervalechinooks.blogspot.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 101 Dividend Achievers By Broker Targets For May

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 101 May Dividend Achievers By Yield

source: YCharts

U.S. Dividend Achievers for this article were selected based on yield. This Base list of 101 equities (showing greater than 2.01% annual payouts) was reduced to 30 when the yield limit was set at 3.31%.

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

Top ten Dividend Achievers selected 4/29/19 by yield, represented four sectors in the Morningstar eleven sector scheme: (1) energy [3 listed]; (2) real estate [4 listed]; (3) consumer defensive [1 listed]; (4) utilities [2 listed].

Top Achiever stock by yield, was one of three energy representatives, Holly Energy Partners (HEP) [1], to lead the Achiever top ten energy team, followed by two more energy issues in slots three, and eight, Enterprise Products Partners LP (EPD)[3]; ONEOK Inc (OKE) [8].

In second place was the first of four real estate achievers, Omega Healthcare Investors Inc (OHI)[2]. The other three real estate achievers placed fifth, seventh, and ninth, National Health Investors Inc. (NHI)[5], W.P. Carey Inc. (WPC) [7], and Urstadt Biddle Properties Inc. (UBA) [9].

A consumer defensive sector representative placed fourth, Universal Corp (UVV) [4], followed by the two utilities representatives in sixth and tenth places, PPL Corp (PPL) [6], and Dominion Energy (D) [10], to complete the top ten May Dividend Achievers by yield.

Actionable Conclusions: (21-30) Ten Achiever Dogs Showed 5.40% To 32.40% Upsides, While (31) Eight More Showed Losses Of -1.05%-4.94% By May, 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 4.27% Advantage For 5 Highest Yield, Lowest Priced Dividend Achiever Dogs To May, 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 4/30/19 and showing the highest dividend yields, represented four of the Morningstar eleven sector scheme.

Actionable Conclusions: (32) Analysts Predicted 5 Lowest-Priced Of Top Ten Highest-Yield Achiever Dogs Delivering 7.61% Vs. (33) 7.3% Net Gains By All Ten Come May, 2020

source: YCharts

$5000 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 4.27% more net gain than $5,000 invested as $.5k in each of all ten. The second lowest-priced Dividend Achiever, Holly Energy Partners LP (HEP), was found to deliver the best net gain at 11.47%.

source: YCharts

The five lowest-priced dividend Achiever dogs as of April 30 were: Urstadt Biddle Properties Inc (UBA); Holly Energy Partners LPP (HEP); Enterprise Products Partners LP (EPD); PPL Corp (PPL); Omega Healthcare Investors Inc (OHI); with prices ranging from $21.93 to $35.39.

Five higher-priced dividend Achievers for April 5 were: Universal Corp (UVV); ONEOK Inc (OKE); W.P. Carey Inc (WPC); National Health Investors Inc (NHI); Dominion Energy Inc D; W.P. Carey Inc (WPC), whose prices ranged from $53.86 to $79.32.

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 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 www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in YahooFinance. Dog photo: intervalechinooks.blogspot.com

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 Yahoo Finance. Dog photo: intervalechinooks.blogspot.com