Kiplinger's May List Of Most Reliable Dividend Stocks On Earth

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Includes: ABBV, BAESY, BTI, CNQ, CVX, ENB, ENGGY, IMBBY, MFGP, RDEIY, RHHBY, SKVKY, SNY, SU, T, WPP
by: Fredrik Arnold
Summary

Kiplinger Today, a "daily digest of timely, trusted advice" regularly lists hundreds of opportune stocks and funds for investors. This World's Best list was compiled by Kiplinger in October 2018.

This list is also known as “International Dividend Aristocrats”. They have raised dividends for at least five straight years (Canadian firms), 10 years (E.U.-based firms), or 25 years (U.S).

These 97 select dividend stocks ranged 0.49%-11.04% in annual yield and ranged -8.38%-65.21% in annual price target upsides per brokers 5/6/19.

Top Ten Kiplinger most reliable long-term dividend stocks on earth boasted gains from 17.25% to 36.9%.

$5k invested in the lowest-priced five top-yield Kiplinger most reliable dividend dogs showed 63.64% LESS net gain than from $5k invested in all ten. Bigger high-price Kiplinger reliable dividend stocks ruled the pack.

Actionable Conclusions (1-10): Analysts Estimated 17.25% To 36.9% Net Gains For Ten Top Kiplinger Most Reliable Dividend Dogs Into 2020

Four of ten top Kiplinger most reliable dividend stocks by yield were among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, the yield-based forecast for these May dogs was graded by Wall St. Wizards as 40% accurate.

Source: YCharts.com

Projections were based on estimated dividends from $1,000 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 May 6, 2020, were:

British American Tobacco (BTI) was projected to net $368.97, based on a median of target price estimate from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 17% less than the market as a whole.

Canadian Natural Resources (NYSE:CNQ) was projected to net $336.54, based on a median of target price estimates from twenty-six analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 20% more than the market as a whole.

WPP PLC (WPP) netted $262.01 based on the median of estimates from two analysts, plus dividends. The Beta number showed this estimate subject to risk, 7% more than the market as a whole.

Chevron (CVX) was projected to net $210.23, based on the median of target estimates from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk equal to the market as a whole.

Roche Holding AG (OTCQX:RHHBY) was projected to net $209.21, based on dividends, plus the median of target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to risk 51% less than the market as a whole.

Sanofi SA (SNY) was projected to net $208.77, based on dividends, plus median target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk 47% less than the market as a whole.

AbbVie Inc. (ABBV) was projected to net $180.023, based on the median of target price estimates from twenty-two analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 14% more than the market as a whole.

Enbridge (ENB) was projected to net $180.03, based on dividends, plus a mean target price estimate from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to risk 31% less than the market as a whole.

AT&T Inc. (T) was projected to net $177.79, based on dividends, plus a mean target price estimate from twenty-nine analysts, less broker fees. The Beta number showed this estimate subject to risk 42% under the market as a whole.

Suncor Energy (SU) was projected to net $172.47 based on dividends, plus a median target estimate from twenty-seven brokers, less transaction fees. The Beta number showed this estimate subject to risk 16% more than the market as a whole.

The average net gain in dividend and price was estimated at 23.07% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risks 13% less than the market as a whole.

Source: designswan.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".

97 Kiplinger Most Reliable Dividend Stocks On Earth By Target Gains

Source: YCharts.com

97 Kiplinger Most Reliable Dividend Stocks On Earth By Yield

Source: YCharts.com

Actionable Conclusions (11-20): 10 Top Kiplinger Most Reliable Dividend Dividend Stocks By Yield

Top ten Kiplinger Most Reliable Dividend stocks selected 4/6/19 by yield represented eight of eleven Morningstar sectors. First place was claimed by the first of two consumer-defensive sector representatives, Imperial Brands PLC (OTCQX:IMBBY) [1]. The other consumer cyclical representative placed fifth, British American Tobacco PLC [5].

Two from the utilities sector placed second, and third, Red Electrica Corporacion SA (OTCPK:RDEIY) [2], Enagas SA (OTCPK:ENGGY) [3].

The lone financial services representative emerged in fourth place, Skandinaviska Enskilda Banken AB (OTCPK:SKVKY) [4].

The lone communications services pup claimed sixth place, AT&T Inc. (T) [6]. A lone consumer defensive representative placed seventh, WPP PLC [7].

Finally, single-sector representatives in energy, technology, and industrials placed eighth, ninth and tenth, Enbridge Inc. (ENB) [8], Micro Focus International PLC (MFGP) [9], and BAE Systems PLC (OTCPK:BAESY) [10], to complete the Kiplinger most reliable dividend top ten by yield.

Actionable Conclusions: (21-30) Top Ten Kiplinger Most Reliable Dividend Dogs Showed 13.98%-31.95 Upsides While (31) One Lowly Downsider Sank -2.36%

Source: YCharts.com

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

Analysts Forecast A 63.64% Disadvantage For 5 Highest Yield, Lowest Priced Kiplinger Most Reliable Dividend Stocks To 2020

Ten top Kiplinger most reliable dividend dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.

Source: YCharts.com

As noted above, top ten Kiplinger most reliable dividend (MRD) dogs screened 5/6/19 showing the highest dividend yields represented eight of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Kiplinger MRD Dogs (32) Delivering 4.8% Vs. (33) 13.19% Net Gains by All Ten Come May 2020

Source: YCharts.com

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Kiplinger April Shower kennel by yield were predicted by analyst 1-year targets to deliver 63.64% LESS gain than $5,000 invested as $.5k in all ten. The eighth lowest priced selection, British American Tobacco PLC, was projected to deliver the best net gain of 36.9%.

Source: YCharts.com

The five lowest-priced top-yield Kiplinger most reliable dividend dogs as of May 6 were: Skandinaviska Enskilda Banken AB, Red Electrica Corporacion SA; Enagas SA; Micro Focus International PLC; BAE Systems PLC, with prices ranging from $9.50 to $25.05.

Five higher-priced Kiplinger most reliable dividend dogs as of May 6 were: AT&T Inc.; Imperial Brands PLC; Enbridge Inc.; British American Tobacco PLC; WPP PLC, whose prices ranged from $30.59 to $63.55.

The 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 S&P 500 stock purchase or sale research process. These were not recommendations.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from IndexArb; YCharts; Yahoo Finance; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: designswan.com.

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.