These 108 Top S&P 500 Dogs Fetch Bountiful Yield, Gains, And Upside In June

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Includes: CTL, F, HP, IRM, KIM, LYB, M, MAC, MO, NLSN, NWL, OXY, SLB, SPG, STX, T, VLO, WRK, WY
by: Fredrik Arnold
Summary

"The S&P 500 is widely regarded as the best single-gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization."

Broker target-estimated June top ten net gains ranged 30.73-47.03% topped by CenturyLink 5/23/19. The ten, KSS; NWL; HP; OXY; WY; LYB; WRK; SLB; VLO; CTL, averaged 47.53% gains.

108 Top S&P 500 index stocks ranged 3.02-10.35% in estimated annual yield. Top 10, WY, NLSN, MO, NWL, F, T, M, MAC, IRM, & CTL averaged 6.91%.

S&P 500 index top ten firms by broker target-price upsides, KSS, NWL, HP, T, OXY, WY, LYB, WRK, CTL, SLB, & VLO, averaged 41.23%.

$5k invested in the lowest-priced five June top-yield S&P 500 dividend dogs showed 3.71% more net-gain than from $5k invested in all ten. The little, low-price S&P 500 dogs won out.

Actionable Conclusions (1-10): Analysts Estimated 30.73% To 47.03% Net Gains For Ten S&P 500 Dogs To June 2020

Three of ten top S&P 500 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, this yield-based forecast for S&P 500 dogs was graded by Wall St. Wizards as 30% accurate.

Source: YCharts.com

These 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 June 1, 2020, were:

CenturyLink Inc. (CTL) was projected to net $470.31 based on median target price estimate from sixteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk 23% less than the market as a whole.

Valero Energy (VLO) was projected to net $449.98 based on median target price estimate from thirteen analysts plus the estimated annual dividend less broker fees. The Beta number showed this estimate subject to risk 16% more than the market as a whole.

Schlumberger (SLB) was projected to net $449.01 based on median target estimate from eighteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk 77% less than the market as a whole.

WRKCo Inc. (WRK) was projected to net $415.05 based on the median target price estimate from seventeen analysts plus annual dividend less broker fees. The Beta number showed this estimate subject to risk 10% more than the market as a whole.

LyondellBasell (LYB) was projected to net $373.39.54 based on dividends plus median target price estimates from twenty-three analysts less broker fees. The Beta number showed this estimate subject to risk 8% less than the market as a whole.

Weyerhaeuser (WY) was projected to net $350.14 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 67% less the market as a whole.

Occidental Petroleum (OXY) was projected to net $349.32 based on dividends plus a mean target price estimate from twenty analysts less broker fees. The Beta number showed this estimate subject to risk 17% less than the market as a whole.

Helmerich & Payne (HP) was projected to net $320.04 based on dividends plus the median target price estimate from twenty-one analysts less broker fees. The Beta number showed this estimate subject to risk 54% more than the market as a whole.

Newell Brands (NWL) netted $318.03 based on a median estimate from seventeen analysts plus dividends. The Beta number showed this estimate subject to risk 17% more than the market as a whole.

Kohl's (NYSE:KSS) was projected to net $307.31 based on the median target price estimate from nineteen analysts plus annual dividend less broker fees. The Beta number showed this estimate subject to risk 25% more than the market as a whole.

The average net gain in dividend and price was estimated at 47.53% on $10k invested as $1k in each of these ten stocks. These gain risk 18% less than the market as a whole.

Source: iheartdogs.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".

108 Top S&P 500 Dividend Dogs By Yield

Source: us.spindices/YCharts

Actionable Conclusions (11-20): 10 Top S&P 500 Dividend Stocks By Yield

Top ten S&P 500 stocks selected 5/23/19 by yield represented five of eleven Morningstar sectors. First place was claimed by one of two communication services sector representatives - CenturyLink [1]. The other placed fifth - AT&T (T) [5].

In second place was the first of three real estate sector representatives - Iron Mountain (NYSE:IRM) [2]. Its counterparts placed third and tenth - Macerich (MAC) [3] and Weyerhaeuser [10].

Two from the consumer cyclical sector placed fourth and sixth - Macy's (M) [4] and Ford Motor (F) [6].

In seventh and eighth places were two consumer defensive representatives - Newell Brands [7] and Altria Group (MO) [8].

Finally, one industrials sector rep placed ninth - Nielsen Holdings PLC (NLSN) [9] - to complete the S&P 500 top ten dogs for June.

Actionable Conclusions: (21-30) Top Ten S&P 500 Dogs Showed 26.49% To 41.23% Upsides To June 2020; (31) No Downsiders Were Detected.

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 3.71% Advantage For 5 Highest Yield, Lowest Priced S&P 500 Dividend Stocks To June 2020

Ten top S&P 500 dividend dogs were culled by yield for this monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

Source: YCharts.com

As noted above, top ten S&P 500 dividend dogs selected 5/23/19 showing the highest dividend yields represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of the Top Ten Highest-Yield S&P 500 Dogs (32) Delivering 25.62% Vs. (33) 24.71% Net Gains by All Ten Come June 2020

Source: YCharts.com

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend S&P 500 kennel by yield were predicted by analyst 1-year targets to deliver 3.71% more gain than $5,000 invested as $.5k in all ten. The very lowest priced selection, CenturyLink, was projected to deliver the best net gain of 47.03%.

Source: YCharts.com

The five lowest-priced top-yield S&P 500 dividend dogs as of May 23 were: CenturyLink, Ford Motor, Newell Brands, Macy's, and Weyerhaeuser, with prices ranging from $9.66 to $22.91.

Five higher-priced S&P 500 dividend dogs as of May 23 were: Nielsen Holdings PLC, Iron Mountain, AT&T, Seagate Technology PLC (STX), Macerich, and Altria Group, with prices ranging from $23.41 to $52.81.

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.

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: globalanimal.org

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.