Dogcatcher Reader Favorites (And Rogues) In Equities And Funds From April 16 To May 10

|
Includes: AMZA, APU, ATVI, AVH, CAMT, CTL, CVX, ECC, ET, ETM, GIS, HD, IMBBY, JMP, KNOP, NRZ, OXY, PRT, SMHB, SMHD, SMLP, SNH, SXCP, UNIT
by: Fredrik Arnold
Summary

April 16 - May 10, Fredrik Arnold article readers described 49 equities & funds in their comments. Some lamented bad news, so bad news investments mixed in with (mostly) favorites.

This month's ten analyst-augured TOP-NET-GAIN reader faves and rogues (ReFa/Ro) were: SNH, KNOP, ETM, CTL, SMLP, OXY, CAMT, ET, SXCP, and PRT averaging 39.81% net.

Ten analyst-target-augured TOP-PRICE-UPSIDE reader faves and rogues (ReFa/Ro) were: ENB, SNH, SMLP, CTL, ETM; OXY, ET, CAMT, SXCP, and PRT, boasting 31.58% average price gains.

By YIELD, the following ReFa/Ro made the top ten: APU; NRZ; IMBBY; SXCP; PRT; SMLP; ECC; SMHD; SMHB; AMZA. They averaged 13.63% yields. (Three made all-three lists: SMLP; PRT; SXCP).

$5k invested in the lowest-priced five of ten top yield May ReFa/Ro showed 44.22% more net gain than from the same investment in all ten. Little low-priced ReFa/Ro mentioned stocks were clearly broker favorites, too.

Reader Selections

Since May 2017, any dividend-paying stock mentioned in a message, e-mail, or comment to the author is fair game for a reader favorite listing in this series of articles. Thus, it is possible that only rogues and discontinued, or dreadful, doubtful dividend issues may appear.

Lately, readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however, praise the effort to sort promising opportunities out of the thousands of dividend offers. After all, yield counts when searching for dividend winners.

Most valuable to the writer, however, are those reader comments that truly catch errors in my calculations or changes in direction. Examples like the reader who misses my "safer" dividend follow-up articles because they contain dividend payout ratios. Readers this month noted Q Pay JMP Group LLC (JMP) among my MoPay list from YCharts. Another reader last month detected my gaff confusing volatility with risk in my beta reports.

Others called out blunders such as missing the dividend cut by Uniti Group (UNIT) and botching Home Depot's (HD) price in March; crediting Activision (ATVI) with 4x its annual dividend in February; claiming Dividend 15 Split Corp II [DF.TO] a monthly pay when it only paid four dividends last year; Avianca Holdings SA (AVH) was on the January MoPay list when it stopped paying dividends in September; non-dividend paying Trez Capital [TZS.TO] and Canadian Life [LFE.TO] stocks were listed in January; I showed Chevron (CVX) as both a low price and higher price stock in the Aristocrats in November; and gave General Mills (GIS) the GM ticker symbol in a previous month, were all called out by readers.

Below are 49 tangible results for the reader favorite and rogue equities and funds mentioned between April 16 and May 10.

Actionable Conclusions (1-10): Brokers Detected 20% To 69.8% Net Gains For 10 ReFa/Ro Stocks And Funds To May 2020

Three reader-favorite top yield stocks were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for the reader-fave stocks, as graded by Wall St. wizards, was 30% accurate.

Source: YCharts

The following probable profit-generating trades were identified by projections based on estimated dividend returns from $1k invested in each of the highest yielding stocks. That dividend and the median of aggregate one-year analyst target prices, as reported by YCharts, created the 2019-2020 data points.

Note: one-year target prices by lone analysts were applied in two cases this month. Ten probable profit-generating trades projected to May 10, 2020, were:

PermRock Royalty Trust (PRT) was projected to net $698.13 based on the median target estimate from four analysts plus annual dividend less broker fees. A Beta number was not available for PRT.

SunCoke Energy Partners LP (SXCP) netted $579.79 based on the median target price estimate from three analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 57% over the market as a whole.

Energy Transfer LP (ET) was projected to net $486.98 based on the median target price estimate from nineteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 72% over the market as a whole.

Camtek Ltd. (CAMT) was projected to net $471.21 based on dividends plus the median target price estimate from two analysts less broker fees. The Beta number showed this estimate subject to risks 42% over the market as a whole.

Occidental Petroleum Corp. (OXY) was projected to net $336.59 based on target price estimate from eighteen analysts plus annual dividends less broker fees. The Beta number showed this estimate subject to risks 84% less than the market as a whole.

Summit Midstream Partners LP (SMLP) was projected to net $320.94 based on dividends plus a median target price estimate from nine analysts less broker fees. The Beta number showed this estimate subject to risks 71% over the market as a whole.

CenturyLink Inc. (CTL) was projected to net $303.10 based on the median target price estimate from sixteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 26% under the market as a whole.

Entercom Communications (ETM) was projected to net $296.25 based on a target price estimate from nine analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 21% more than the market as a whole.

KNOT Offshore Partners LP (KNOP) was projected to net $246.01 based on a median target price estimate from four analysts plus the projected annual dividend less broker fees. The Beta number showed this estimate subject to risks 94% less than the market as a whole.

Senior Housing Properties Trust (SNH) netted $241.51 based on dividends plus the median target price estimate from seven analysts less broker fees. The Beta number showed this estimate subject to risks 31% less than the market as a whole.

Average net gain in dividend and price was estimated at 39.81% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risks 3% over the market as a whole.

Source: growonyou.com

The Dividend Dogs Rule

The "dog" moniker was earned by stocks exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. So, the highest yielding stocks in any collection have become affectionately known as "dogs." More precisely, these are, in fact, best called, "underdogs."

49 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for FoFa/Ro stocks as of market closing prices 5/10/19 for 49 equities and funds revealed the actionable conclusions discussed below.

See any Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analysts' price upside estimates expanded the stock universe to include popular growth equities, as desired.

Actionable Conclusions (11-20): ReFa/Ro Top Equity, InfraCap MLP ETF (AMZA), Led 49 By Yield Into May

Source: YCharts

ReFa/Ro sorted by yield calculated as of market close 5/10/19 represented 11 Morningstar sectors as well as one ETF, two ETNs, and one CEIC among 49 selections.

Of the leading ten by yield, the top reader-mention was the lone ETF representative, InfraCap MLP ETF [1].

Two exchange-traded notes placed second and third - ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHB) [2] and ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHD) [3].

One financial services entity placed fourth - Eagle Point Credit Co LLC (ECC) [4]. Thereafter, energy firms placed fifth and sixth - Summit Midstream Partners LP (SMLP) [5] and PermRock Royalty Trust (PRT) [6]. Then, a basic material firm placed seventh - SunCoke Energy Partners LP (SXCP) [7].

Finally, single consumer defensive, real estate, and utilities firms placed eighth, ninth, and tenth - Imperial Brands PLC (OTCQX:IMBBY) [8], New Residential Investment Corp (NRZ) [9], and AmeriGas Partners LP (APU) [10], and completed the top 10 ReFa/Ro for May.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 15.06% To 57.34% Gains To May 2020.

Source: YCharts

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

Analyst Targets Predicted A 44.22% Advantage For 5 Highest Yield, Lowest Priced Reader Favorite Stocks To May 2020

10 top ReFa/Ro 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 ReFa/Ro selected 4/16/19 showing the highest dividend yields represented: energy (1), real estate (2), financial services (2), closed-end investment companies (2), basic materials (1), utilities (1), and industrials (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Top 10 Highest-Yield Reader Favorites & Rogues To (33) Deliver 37.87% Vs. (34) 26.26% Net Gains by All 10 To May 2020

Source: YCharts

5k invested as $1k in each of the five lowest-priced stocks in the top 10 ReFa/Ro kennel by yield were predicted by analyst one-year targets to deliver 44.22% more net gain than $5k invested in all 10. The third lowest priced ReFa/Ro top yield equity, PermRock Royalty Trust, was projected to deliver the best net gain of 69.81%.

Source: YCharts

The five lowest-priced ReFa/Ro top yield dogs for May 10 were: InfraCap MLP ETF (AMZA); Summit Midstream Partners LP (SMLP); PermRock Royalty Trust (PRT); SunCoke Energy Partners LP (SXCP); UBS ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHD), with prices ranging from $5.66 to $14.33 per share.

Five higher-priced ReFa/Ro for May 10 were: New Residential Investment Corp (NRZ); Eagle Point Credit Co LLC (ECC); ETRACS 2x Monthly Pay Ldvdraged US Small Cap High Dividend ETN (OTCQX:IMBBY), and AmeriGas Partners LP (APU) whose prices ranged from $16.78 to $35.47.

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 analysts' 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 49 equities and funds discussed in this article were submitted in comments from Seeking Alpha members, nicknamed: !ArbForLife; AB User; allday1234; AndreasHayn; ARG1; arichday; brainleft; Bulldog67; cbama12495; Cole Carter; Croogie; dmankl; Dog in da house; Doug De Bono; Feckless191; jhnward; Joseph Oppenheim; killiondt; kindkath; mgking_@hotmail.com; modinvestor; Ms. MoneyPenny; Nancy Kramer; Peder Steen Jensen; PendragonY; pmbrandt; potted plant; rstillin; rwingjr; schmitlap; sd55; StillNewToThis; TheRoseLady; Unojack; villanema; WMX0102.

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 FoFave 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: westhartfordpetsitters.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.