June Dividend Achiever Dogs Chase Gains And Upsides

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Includes: ADM, CNP, CVS, CVX, D, EIX, EPD, HEP, NHI, OHI, OKE, PPL, QCOM, UBA, UVV, WBA, WPC
by: Fredrik Arnold
Summary

Dividend Achiever stocks are distinguished by 10 or more straight years of higher dividends. Some 256 Achiever equities are balanced by sectors and capitalization. The Invesco Dividend Achievers Portfolio ETF is their tracking fund.

Broker target-estimated June top 10 Dividend Achiever net gains ranged 12.92-35.33%, from CenterPoint Energy, Holly Energy Partners, ONEOK Inc., Edison International, Walgreens Boots Alliance, Chevron Corp., Enterprise Products Partners, Archer-Daniels-Midland, CVS Health Corp., and topped by Qualcomm, as calculated on 6/3/19.

102 Top Dividend Achievers ranged in yield from 2.03% to 10%. The top 10, Dominion Energy, W.P. Carey, Urstadt Biddle Properties, Universal Corp., National Health Investors Inc., ONEOK Inc., PPL Corp., Enterprise Products Partners, OHI, and Holly Energy Partners averaged 6.00% yield.

Top 10 Achiever price upsides by Digital Realty Trust, CenterPoint Energy, ONEOK Inc., Edison International, Walgreens Boots Alliance, Chevron Corp., Enterprise Products Partners, Archer-Daniels-Midland, CVS Health Corp., and Qualcomm averaged 20.39% per 1-year broker targets.

$5k invested in the lowest-priced 5 of the June top-yield 10 Dividend Achiever stocks showed 36.03% more net gain than from a $5k investment in all 10.

Actionable Conclusions (1-10): Broker Targets Forecast 23.61% Average Net Gains For 10 Dividend Achievers To June 2020

Three of top 10 dividend-yielding Achievers were verified as being among the top 10 gainers for the coming year based on analyst 1-year target prices. (The names are tinted in the list below). Thus, this month the dog strategy for the Achievers was graded by Wall Street watchers as 30% accurate.

The following probable profit-generating trades were identified by projections based on estimated dividend returns from $1000 invested in each of the highest-yielding stocks and their aggregate 1-year analyst median target prices, as reported by YCharts. Note: 1-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to April 30, 2020, were:

Source: YCharts

Qualcomm Inc. (QCOM) was projected to net $353.33 based on dividends plus a median of target price estimates from twenty-five analysts, less broker fees. The Beta number showed this estimate subject to risk 61% more than the market as a whole.

CVS Health Corp. (CVS) was projected to net $349.85 based on dividends plus mean target price estimates from twenty-seven analysts, less broker fees. The Beta number showed this estimate subject to risk 12% less than the market as a whole.

Archer-Daniels-Midland (ADM) netted $303.48 based on dividends plus the median target price estimates by fourteen analysts, less broker fees. The Beta number showed this estimate subject to risk 3% over the market as a whole.

Enterprise Products Partners (EPD) was projected to net $283.37 based on dividends plus the median of target price estimates from twenty-four analysts, less broker fees. The Beta number risk 9% less than the market as a whole.

Chevron Corp. (CVX) was projected to net $238.00 based on the median of target price estimates by twenty-three analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk 2% less than the market as a whole.

Walgreens Boots Alliance (WBA) was projected to net $209.43 based on dividends plus the median of target price estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to risk 22% less than the market as a whole.

Edison International (EIX) was projected to net $187.45 based on dividends plus mean target price estimates from seventeen analysts, less broker fees. The Beta number showed this estimate subject to risk 96% less than the market as a whole.

ONEOK Inc. (OKE) was projected to net $176.22 based on a median target price estimate from twenty-three analysts, combined with projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk 19% more than the market as a whole.

Holly Energy Partners LP (HEP) was projected to net $130.66 based on dividends plus the median pf target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk 27% less than the market as a whole.

CenterPoint Energy Inc. (CNP) was projected to net $129.19 based on dividends plus the median of target price estimates from eighteen analysts, less broker fees. The Beta number showed this estimate subject to risk49% under the market as a whole.

Average net gain in dividend and price was estimated at 23.61% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 13% less than the market as a whole.

Source: akc.org

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".

Top 102 Dividend Achievers By Broker Targets For June

Source: YCharts

"The NASDAQ Dividend Achievers Index is made up of 256 stocks with 10+ consecutive years of dividend increases that meet certain minimum size and liquidity requirements. It is one of the better sources for high quality dividend growth stocks." - Sure Dividend

Top 102 June Dividend Achievers By Yield

Source: YCharts

U.S. Dividend Achievers for this article were selected based on yield. This base list of 102 equities (showing greater than 2.03% annual payouts) was reduced to 30 when the yield limit was set at 3.46%.

Actionable Conclusions (11-20): Yield Metrics Singled Out 10 Top Dividend Achievers

Top 10 Dividend Achievers selected 5/03/19 by yield, represented four sectors in the Morningstar eleven sector scheme: (1) energy [3 listed]; (2) real estate [4 listed]; (3) utilities [2 listed]; (4) consumer defensive [1 listed].

The top Achiever stock by yield was one of three energy representatives, Holly Energy Partners [1], to lead the Achiever top 10 energy team, followed by two more energy issues in slots three and five, Enterprise Products Partners LP [3] and ONEOK Inc. [5].

In second place was the first of four real estate achievers, Omega Healthcare Investors Inc. (OHI) [2]. The other three real estate achievers placed sixth, eighth, and ninth: National Health Investors Inc. (NHI) [6], Urstadt Biddle Properties Inc. (UBA) [8], and W.P. Carey Inc. (WPC) [9], respectively.

Two utilities representatives placed fourth and tenth: PPL Corp. (PPL) [4] and Dominion Energy Inc. (D) [10], respectively.

Finally, a consumer defensive sector representative placed seventh, Universal Corp. (UVV) [7], to complete the top 10 June Dividend Achievers by yield.

Actionable Conclusions: (21-30) Ten Achiever Dogs Showed 9.26%-32.61% Upsides, While (31) Seven More Showed Losses Of -0.36%-6.6% By June 2020

Source: YCharts

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

Analysts Asserted A 36.03% Advantage For 5 Highest-Yield, Lowest-Priced Dividend Achiever Dogs To June 2020

Ten top Dividend Achiever dogs were culled by yield. Their monthly update yield (dividend / price) results verified by YCharts did the ranking.

Source: YCharts

As noted above, the top 10 Dividend Achiever dogs selected 6/3/19 and showing the highest dividend yields represented four of the Morningstar 11-sector scheme.

Actionable Conclusions: (32) Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Achiever Dogs Delivering 13.2% Vs. (33) 9.7% Net Gains By All 10 Come June 2020

Source: YCharts

$5000 invested as $1k in each of the five lowest-priced stocks in the top 10 Dividend Achiever kennel by yield were predicted by analyst 1-year targets to deliver 36.03% more net gain than $5,000 invested as $.5k in each of all 10. The third lowest-priced Dividend Achiever, Enterprise Products Partners LP, was 28.34%.

Source: YCharts

The five lowest-priced dividend Achiever dogs as of June 3 were: Urstadt Biddle Properties Inc., Holly Energy Partners LPP, Enterprise Products Partners LP, PPL Corp., and Omega Healthcare Investors Inc., with prices ranging from $21.87 to $35.45.

Five higher-priced dividend Achievers as of June 3 were: Universal Corp., ONEOK Inc., Dominion Energy Inc., National Health Investors Inc., and W.P. Carey Inc., whose prices ranged from $58.35 to $83.51.

This distinction between 5 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 20-80% accurate on the direction of change and just 0-20% 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.

The stocks listed above were suggested only as possible reference points for your Dividend Achiever 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 Indexarb.com; YCharts; Yahoo Finance; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: akc.org

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.