Your Monthly-Paid Dividends From 96 U.S. May Equities And 80 Funds

|
Includes: AGNC, AHOTF, AMJL, AMZA, ARR, BRG, CEFL, CPTA, DVHL, DX, GECC, GLAD, GNL, JMP, MORL, MRRL, NCZ, ORC, OXLC, OXSQ, PRT, PSEC, PVL, REML, ROYT, SCS, SMHD, TAHO, VET, WSR
by: Fredrik Arnold
Summary

U.S. Exchange May monthly-paid (MoPay) dividends, upsides, and net-gains: 1. Stocks by yield >1% (96); 2. Stocks by price-upside (30); 3. Closed-End-Investment-Companies, Exchange-Traded-Funds and Notes (CEICs/MayETFs/ETNs) by yield (80).

U.S. MoPay equities expanded in number but not gains. Canadian MoPays are omitted. CEICs/ETFs/ETNs are combined and limited to yields over 7.17%.

Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs. Equities; 4. Fund risks/rewards. All per prices as of 5/3/19.

Analyst annual-targets revealed that investing $5k in the lowest priced five of ten top yield MoPay US exchange equities produced 28.25% less gain than $5k invested in all ten.

Actionable Conclusions (1-10): Brokers Believed Top Ten MoPay Equities To Net 13.2% to 71.02% Gains By May 2020

Five of the ten top-yield MoPay stocks (shaded in the chart above) were verified as being among the top-ten gainers for the coming year based on analyst one-year target prices. Thus, the yield-based strategy for this MoPay group, as graded by broker estimates for this month, proved 50% accurate.

Source: YCharts

Projections based on estimated dividend amounts from $1000 invested in each of the ten highest yielding stocks and the one-year analyst median target prices for those stocks, as reported by YCharts, made the data points. Note: one-year target prices from one analyst were not applied (n/a). Ten probable profit-generating trades to 2020 were:

PermRock Royalty Trust (NYSE:PRT) netted $710.21, based on dividend plus the median of target price estimates from four analysts less broker fees. A Beta number was not available for PRT.

Vermilion Energy Inc. (VET) netted $446.03 based on dividends plus the median of annual price estimates from sixteen analysts less broker fees. The Beta number showed this estimate subject to risk 4% more than the market as a whole.

Great Elm Capital Corp. (GECC) netted $386.46 based on a median target price estimates from two analysts, plus dividends less broker fees. A beta number was not available for GECC.

Global Net Lease Inc. (GNL) netted $351.65 based on a mean target estimate from three analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk 30% less than the marker as a whole.

Capitala Finance Corp. (CPTA) netted $300. 30, based on dividend, plus the median of target prices estimated by six analysts, less broker fees. The Beta number showed this estimate subject to risks 15% more than the market as a whole.

Dynex Capital Inc. (DX) was forecast to net $160.00 based on mean target price estimates from four analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk 41% less than the market as a whole.

Whitestone REIT (WSR) netted $147.94 based on a median of target price estimates from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 16% more than the market as a whole.

Pacific Coast Oil Trust (ROYT) netted $138.20 based on only estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk 129% more than the market as a whole.

Orchid Island Capital Inc. (ORC) netted $136.80 based on just estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk 59% less than the market as a whole.

Permianville Royalty Trust (PVL) netted $132.00 based on dividends less broker fees. The Beta number showed this estimate subject to risk 46% more than the market as a whole.

Average net gain in dividend and price was 29.1% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk 10% less than the market as a whole.

Actionable Conclusion (11): (Bear Alert) Analysts Anticipated One MoPay Dog To Lose 14.07% By April 2020

The probable losing trades revealed by YCharts were:

Gladstone Capital Corp. (GLAD) cast a loss of $46.90 based on dividend and a projected target price estimate based on the median of projected target price estimates from four analysts, including $10 of broker fees. The Beta number showed this estimate subject to volatility 28% more than the market as a whole.

Prospect Capital Corp. (PSEC) cast a loss of $167.62 based on dividend and a projected target price estimate based on the median of projected target price estimates from three analysts, including $10 of broker fees. The Beta number showed this estimate subject to volatility 22% more than the market as a whole.

Average net loss in dividend and price was estimated at 10.9% on $2k invested as $1k in each of these two stocks. This loss estimate was subject to average volatility 1% over the market as a whole.

Source: etsy.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 specifically, these are, in fact, best called "underdogs."

May Monthly Pay Dividend Data

Three lists produced numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, May 3 closing prices and estimated annual dividends were referenced from YCharts. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) a high yield (and higher risk) MoPay CEICs/ETFs/ETNs list.

Monthly Pay Dividend Qualities

Quarterly, Semi-Annual and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.

Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.

This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Three prominent MoPay firms declared dividend cuts between December 2016 and March 2017.

Former MoPay top ten regular by yield. Blue Bluerock Residential (BRG) announced in December it is retreating to quarterly dividend payments "in keeping with industry tradition."

Third, Capitala Finance Corp. cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017.

For the past year, Tahoe Resources (TAHO) has skipped its monthly payouts and dropped as a MoPay resource.

Top yield stock for October 2016, Orchid Island Capital, released this cautionary note with its monthly dividend announcements: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back-up their words with actions cutting the dividend from $0.14 to $0.11 in February 2018, to $0.09 in March, and to $0.08 for September.

The U.S. MoPay segment is volatile, transitive, and shrinking. More over-the-counter trades in monthly pay equities are available from Canadian firms, many of which are picking up U.S. OTC authorization.

Readers said:

"[Y]ou list a few issues here whose distributions are rife with RETURN OF CAPTAL [ROC] at its most destructive form, funds that pay you back your own money each and every month in their distributions with no regard to what they truly earn...- these should not be included in any list containing the word "dividend." - NYer1

"I can enter or exit a position and still reap dividends for at least 2/3s of the quarter. They also smooth the income stream so I have cash at any given time to make a purchase at dips." - Ed Invests

"Dividend dog investing really works well for income in my experience. I have been seriously invested in dogs the more unloved the better." - Urbannek

"...Nice to see another contrarian strategy. This one seems to take a lot of attention in comparison [to Dow dogs], but I like the monthly rebalance." -colodude

"At this level of risk, I'm only buying monthly dividend payers. Dividend if cut only [sits] for a month and not a quarter." - Sinjjn Smythe

"...love those monthly payers." - Hardog

"Some of us are comfortable investing in Dog stocks because we feel the reward is worth the risk. As long as [my sin stock] continues to pay and raise the dividend like it has for 16 years now, it will have a spot in my portfolio." - Miz Magic DiviDogs

"One thing to point out: These stocks are not buy & hold. If you buy any of these stocks, set a price where you will sell... trailing stops work real good & with mopays you can get out & get back in without losing a whole quarter of dividends..." - drking

List One: 96 US Monthly Pay Dividend Equities by Yield

Source: YCharts

Top ten of these US exchange-listed monthly pay dividend equities showing the best yields into May represented three of the eleven Morningstar market sectors, with representative firms split 3 to 5 to 2 between the energy, real estate, and financial services sectors.

Tops for May was the first of three energy sector representatives, Pacific Coast Oil Trust [1]. The other two energy equities placed third and fourth, Permianville Royalty Trust [3], and PermRock Royalty Trust [4].

The first of five real-estate equities placed third, Orchid Island Capital Inc. [3]. The other four real estate dogs placed seventh through tenth: American Hotel Income Properties REIT LP (OTC:AHOTF) [7]; AGNC Investment Corp. (AGNC) [8]; Dynex Capital Inc. [9]; ARMOUR Residential REIT Inc. [10].

The two financial services representatives placed fifth and sixth, Oxford Square Capital Corp. (OXSQ) [5] and JMP Group LLC (JMP) [6]. These completed the May MoPay top ten list by yield.

List Two: Monthly Pay Dividend Equities by Price Upside

Source: YCharts

The results shown below from YCharts for MoPay dividend stocks as of market closing price May 3 were compared with analyst mean target prices one year out. Ten top stocks displayed 0% to 56.25% price upsides for the next year based on analyst 1 yr. targets.

Four of the ten (tinted) on this price upside list were members of the top ten list by yield. In first five places on this upside list were PermRock Royalty Trust [1], Vermilion Energy Inc. [2], Great Elm Capital Corp. [3], Global Net Lease Inc. [4], Capitala Finance Corp. [5]. The lower level five were, Whitestone REIT [6], Dynex Capital Inc. [7], AGNC Investment Corp. [8], Stellus Capital Investment Corp. (NYSE:SCM) [9] and ARMOUR Residential REIT Inc. (ARR)[10].

Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.

Those ten MoPay stocks showing the highest upside price potential into 2020 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.

List Three: Monthly Pay Dividend Closed End Investment Companies, Exchange Traded Funds, and Notes, by Yield

Eighty top monthly dividend paying (MoPay) Closed End Funds, Exchange Traded Funds and Notes listed below were culled from nearly 800 candidates. Yields greater than 12.9% calculated as of May 3 determined the top ten.

Source: YCharts

The top ten monthly paying dividend investment companies, funds and notes showing the biggest yields for per YChart and YahooFinance data featured seven uncollateralized debt instruments [ETNs], one open-ended investment company [ETF], and two closed-ended investment companies [CEICs].

Source: YCharts

Uncollateralized debt instruments (ETNs) captured the first, through fifth, seventh, and ninth positions: UBS ETRACS M Py 2xLvg MortgREIT ETN SerB (MRRL) [1]; Credit Suisse X-LinksMP2xLvgMortREIT ETN (REML) [2]; UBS ETRACS Mthly Py 2xLvg Mortg REIT ETN (MORL) [3]; UBS ETRACS M Py 2xLvg US Sm Cp HiDiv ETN (SMHD) [4]; Credit Suisse X-Links MP2xLvgAlrnMLP ETN (AMJL) [5]; UBS ETRACS Mthly Py 2xLvg Closed-End ETN (CEFL) [7]; UBS ETRACS M Py 2xLvg Divers Hi Inc ETN (DVHL) [9].

One ETF placed seventh on this list, InfraCap MLP ETF (AMZA) [7]. Finally, two Closed End Investment Companies placed eighth, and tenth, Oxford Lane Capital (OXLC) [8], and AllianzGI Convertible & Inc II (NCZ) [10]. This completed the top ten Exchange Traded Notes, Closed End Investment Companies, and Exchange Traded Funds list for May 2019.

Compare Equity To Fund Performance

Source: YCharts

Note that the top ten equity dividends are now priced lower than those of the top ten funds. This is a new variation in the dividend dog kennel. Still it makes sense, the funds have no accountability for the dividends collected from investments or the money generated from trading. They report only cash flow and returns generated. Dividend equities, however give you a monthly comparative report of price value versus dividends paid.

Background and Actionable Conclusions

Since June 2012 reader suggestions to include funds, trusts, and partnerships, a list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. That list was supplemented by an upside potential article in October and anupside vs. buy and hold in November. Another list factored December 2012 reader comments.

In January, February, March, April, May, June, July, August, September, October, November, and December 2013 readers contributed.

Reader suggestions continued in 2014 following the January, February, March, April, May, June, July, August, September, October, November, and December articles.

2015 continued with readers contributing in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2016 articles in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2017 articles of January, February, March, April, May, June, July, August, September, October, November, and December.

Again last year, the 2018 articles in January, February, March, April, May, June, July, August, September, and October/November, and December. Now we have a new year of 2019 articles in January, February, March, and April, continuing to compare and contrast MoPay equity upside potential to the now lower yield (but higher risk) buy and hold Exchange Traded Funds and Notes.

Yield Metrics Found No Advantage To Five Lowest Priced Of Ten High Yield MoPay Equities

Source: YCharts

Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and YahooFinance, produced the following charts.

Actionable Conclusions: Analysts Estimated 5 Lowest Priced of Top Ten High Yield MoPay Dividend Stocks (12) Would Produce 13.6% Vs. (13) 18.95% Net Gains from All Ten by May 2020

Source: YCharts

$5000 invested as $1k in each of the five Lowest priced stocks of the top ten MoPay dividend dog kennel by yield were predicted by analyst 1-year targets to deliver 28.25% less net gain than $5,000 invested as $.5k in all ten. The eighth lowest priced MoPay dividend dog, PermRock Royalty Trust, was predicted to deliver the best net gain of 71.02%.

Source: YCharts

Lowest priced five MoPay dividend stocks estimated May 3 were: Pacific Coast Oil Trust; Permianville Royalty Trust; JMP Group LLC; American Hotel Income Properties REIT LP; Dynex Capital Inc., with prices ranging from $2.26 to $6.00.

Higher priced five MoPay dividend equities estimated May 3 were: Oxford Square Capital Corp.; Orchid Island Capital Inc.; PermRock Royalty Trust; AGNC Investment; ARMOUR Residential REIT Inc., whose prices ranged from $6.39 to $19.09.

This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, can also be used to find some rewarding dogs in the MoPay Stock kennel.

The added scale of projected gains based on analyst targets contributed 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. It is also the work analysts got paid big bucks to do.

Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.

Gains/declines as reported do not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as decent starting points for your MoPay dividend 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.ycharts.com; www.dividend.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog Photo: etsy.com

Disclosure: I am/we are long MFCSF. 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.