Top 120 Greenhouse Gas Emitters: Changes May Affect Their Dividends

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Includes: BP, CPYYY, DOW, E, EC, ENB, GZPFY, HGKGY, NILSY, OXY, RDS.A, REPYY, SNP, TOT, VEDL, VLVLY, WFAFF, WOPEY, WY
by: Fredrik Arnold
Summary

A benevolent bully has taken to the streets insisting companies account for how climate change will impact businesses. Climate Action 100+ targets 161 firms. 120 of those firms pay dividends.

Top 10 broker target-estimated Climate Action 100+ targeted firms net-gains as of 5/7/19 ranged 17.7%-39.74% from WY, ENB, DOW, BP, OXY, SNP, RDS.A, E, REPYY, and top dog TOT.

Broker target-estimated top 10 Climate Action 100+ targeted firms annual yields from WFAF, HGKGY, VLVLY, WOPEY, EC, SNP, NILSY, VEDL, GXPFY, and CPYYY ranged 7.15%-15.71%.

Top 10 Climate Action 100+ targeted firm price upsides ranged 14.5% to 36.3% from WY, ENB, DOW, BP, SNP, OXY, RDS.A, E, REPYY, TOT.

Analyst one-year targets predict 10 highest yield Climate Action 100+ targeted firms stocks could accumulate 8.17% less gain from $5k invested in the lowest priced five than from $5K invested in all 10. Big stocks plainly lead these Climate Action 100+ targeted dividend dogs.

Actionable Conclusions (1-10): Brokers Forecast 17.7% To 39.74% Net Gains From May's Climate Action 100+ Top 10 Dividend Dogs

One of 10 top yield Climate Action 100+ targeted firms dividend stocks was identified as being among the top 10 net-gainers for the coming year based on analyst 1-year target prices. (It is tinted gray in the chart below). So, our dogcatcher yield-based forecast for Climate Action 100+ targeted dogs was graded by Wall St. brokers as 10% accurate.

Details of the "Green, Rich, and Intimidating" CA100+ organization were published in the April 15, 2019, edition of Bloomberg Businessweek. The organization is also found online at Climateaction100.org. To read my first article on the subject, go here.

Source: YCharts

Projections based on estimated dividend returns from $1k invested in each of the high-yield stocks and their aggregate one-year analyst-estimated median target prices, as reported by YCharts, created the 2019-20 data points. Note: one-year target prices by lone analysts were not applied. 10 probable profit-generating trades projected to May 7, 2020 were:

Total SA (TOT) was projected to net $397.38 based on the median of target price estimates from eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 37% less than the market as a whole.

Repsol SA (OTCQX:REPYY) was projected to net $337.28 based on dividends, plus median target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to risk 7% more than the market as a whole.

Eni SpA (E) was projected to net $324.85, based on dividends, plus a mean target price estimate from four analysts, less broker fees. The Beta number showed this estimate subject to risk 36% less than the market as a whole.

Royal Dutch Shell PLC (RDS.A) was projected to net $324.35, based on dividends, plus the median target price estimates from 13 analysts, less broker fees. The Beta number showed this estimate subject to risk 13% less than the market as a whole.

China Petroleum & Chemical (SNP) was projected to net $306.39, based on target price estimates from four analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 55% more than the market as a whole.

Occidental Petroleum Corp. (OXY) was projected to net $278.74 based on dividends, plus a median target estimate from 19 analysts, less broker fees. The Beta number showed this estimate subject to risk 24% less than the market as a whole.

BP PLC (BP) was projected to net $234.42, based on the median of target estimates from 12 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 20% under the market as a whole.

Dow Inc. (DOW) was projected to net $198.15, based on the median of target estimates from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 26% under the market as a whole.

Enbridge Inc. (ENB) netted $186.01 based on a median target price estimate from 22 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 31% less than the market as a whole.

Weyerhaeuser Co. (WY) was expected to net $177.03, based on the median of target price estimates from 12 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 64% above the market as a whole.

The average net gain in dividend and price was estimated at 27.65% on $10k invested as $1k in each of these 10 dogs. This gain estimate was subject to average risk 6% less than the market as a whole.

Source: youdidwhatwithyourweiner.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."

40 Climate Action 100+ Dogs By Price Target Upsides

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.

120 Climate Action 100+ Dogs By Yield

Source: YCharts

Actionable Conclusions (11-20): 10 Top Climate Action 100+ Stocks Ranked By Yield

Top 10 Climate Action 100+ targeted dividend stocks selected 5/7/19 by yield represented five of 11 Morningstar sectors.

In first place was the first of two utilities representatives, Centrica PLC (OTCPK:CPYYY) [1]. The other utility member placed ninth, Power Assets Holdings Ltd. (OTCPK:HGKGY) [9].

Second best yielding stock, Gazprom Neft PJSC (OTCQX:GZPFY) [1] was the first of four energy firms in the top 10. The others placed fifth,through seventh, China Petroleum & Chemical Corp. [5], Ecopetrol SA (EC) [6], and Woodside Petroleum Ltd. (OTCPK:WOPEY) [7].

Third place revealed the first of two basic materials representative headed by Vedanta Ltd. (VEDL) [3]. The other basic materials representative placed fourth, Mining and Metallurgical Company Norilsk Nickel PJSC (OTCPK:NILSY) [4].

The lone industrial in the top 10 placed eighth, Volvo AB (VLVY) [8], and finally, one consumer cyclical firm placed tenth, Wesfarmers Ltd. (OTCPK:WFAFF) [10], to complete the Climate Action 100+ targeted top 10 by yield for May.

Actionable Conclusions: (21-30) Top 10 Climate Action 100+ Target Dogs Showed 1% To 32.6% Upsides To May 2020, With (31) No Downsides

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 An 8.17% Disadvantage For Five Highest Yield, Lowest Priced Broker Favorites Of 10 Top Climate Action 100+ Stocks To May 2020

10 top Climate Action 100+ targeted 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 Climate Action 100+ targeted dividend stocks by yield represented five of the 11 Morningstar sectors.

Actionable Conclusions: Analysts Projected Five Lowest-Priced of the 10 Highest-Yield Climate Action 100+ targeted Stocks (32) To Fetch 10.11% Vs. (33) 11.02% Net Gains by All Ten by May 2020

Source: YCharts

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 broker favorite dividend kennel by yield were predicted to produce 8.17% LESS gain than $5k invested as $.5k in all 10. The 10th lowest-priced Climate Action 100+ targeted top yield stock, China Petroleum & Chemical Corp., was projected to deliver the best net gain of 30.64%.

Source: YCharts

The five lowest-priced Climate Action 100+ targeted top 10 dividend stocks May 7 were: Centrica PLC, Power Assets Holdings Ltd, Vedanta Ltd., Volvo AB (OTCPK:VLVLY), Ecopetrol SA, with prices ranging from $5.56 to $17.57.

Five higher-priced Climate Action 100+ targeted dividend stocks for May 7 were: Mining and Metallurgical Company Norilsk Nickel PJSC, Woodside Petroleum Ltd., Wesfarmers Ltd., Gazprom Neft PJSC, China Petroleum & Chemical Corp., whose prices ranged from $21.64 to $73.89.

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% 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 Nasdaq dividend dog stock purchase or sale research process. These were not recommendations.

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: youdidwhatwithyourweiner.com

Disclosure: I am/we are long GE, VEDL. 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: 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.