Seeking Alpha

July Dividend Achiever Dogs For Dividend Longevity, Top Yields, And Growth

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

Dividend Achiever stocks show 10+ years of increasing dividends. Some 256 Achiever equities are balanced by sectors and capitalization. PFM is their tracking ETF.

Broker target-estimated July top ten Dividend Achiever net gains ranged 8-31.67%, from SBSI, PPL, OKE, DLR, EIX, CNP, CVX, ADM, EPD, and topped by CVS, as calculated 7/2/19.

100 Top Dividend Achievers ranged in yield from 2.02% to 9.60%. Top ten, D, UVV, OKE, WPC, UBA, NHI, PPL, EPD, OHI, and HEP averaged 5.83% yield.

Top-ten Achiever price upsides by GWW, LECO, EPD, ADM, ANDE, KR, MGRC, CVS, TDS, and NUS averaged 24.57% per 1yr. broker targets.

$5k invested in the lowest-priced five of the July top-yield ten Dividend Achiever stocks showed 28.23% more net gain than from a $5k investment in all ten.

Actionable Conclusions (1-10): Broker Targets Forecast 14.68% Average Net Gains For Ten Dividend Achievers To July 2020

Three of ten top dividend-yielding Achievers were verified as being among the top ten 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 St. watchers as 30% accurate.

The following probable profit generating trades were identified by projections based on estimated dividend returns 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 July 2, 2020, were:

Source: YCharts

CVS Health Corp. (CVS) was projected to net $316.65 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.

Enterprise Products Partners (EPD) was projected to net $235.69 based on dividends plus the median target price estimates from twenty-four analysts less broker fees. The beta number risk 12% less than the market as a whole.

Archer-Daniels Midland (ADM) netted $211.94 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.

Chevron Corp. (CVX) was projected to net $155.76 based on the median target price estimates by twenty-two analysts combined with projected annual dividend less broker fees. The beta number showed this estimate subject to risk equal to the market as a whole.

CenterPoint Energy Inc. (CNP) was projected to net $119.36 based on dividends plus the median target price estimates from twenty analysts less broker fees. The beta number showed this estimate subject to risk 52% under the market as a whole.

Edison International (EIX) was projected to net $98.57 based on dividends plus mean target price estimates from seventeen analysts less broker fees. The beta number showed this estimate subject to risk 86% less than the market as a whole.

Digital Realty Trust (DLR) was projected to net $85.65 based on dividends plus the median target price estimates from twenty-four analysts less broker fees. The beta number showed this estimate subject to risk 60% less than the market as a whole.

ONEOK, Inc. (OKE) was projected to net $82.29 based on the median target price estimates from twenty-four analysts combined with projected annual dividend less broker fees. The beta number showed this estimate subject to risk 60% less than the market as a whole.

PPL Corp. (PPL) was projected to net $82.29 based on dividends plus the median target price estimates from twenty-four analysts less broker fees. The beta number showed this estimate subject to risk 18% less than the market as a whole.

Southside Bancshares Inc. (SBSI) was projected to net $80.00 based on dividends plus a median target price estimates from five analysts less broker fees. The beta number showed this estimate subject to risk 25% less than the market as a whole.

Average net gain in dividend and price was estimated at 14.68% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 21% less than the market as a whole.

Source: earthfare.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".

Top 100 Dividend Achievers By Broker Targets For July

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."

- suredividend.com

Top 100 July Dividend Achievers By Yield

Source: YCharts

U.S. Dividend Achievers for this article were selected based on yield. This base list of 100 equities (showing greater than 2.02% annual payouts) was reduced to 30 when the yield limit was set at 3.24%.

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

Top ten Dividend Achievers selected 7/2/19 by yield represented four sectors in the Morningstar eleven sector scheme: (1) energy [3 listed], (2) real estate [4 listed], (3) utilities [2 listed], and (4) consumer defensive [1 listed].

Top Achiever stock by yield was one of the three energy representatives - Holly Energy Partners (HEP) [1] - to lead the Achiever top ten energy team, followed by two more energy issues in slots three and eight - Enterprise Products Partners [3] and ONEOK, Inc. [8].

In second place was the first of the four real estate achievers - Omega Healthcare Investors Inc. (OHI) [2]. The other three real estate achievers were placed fifth, sixth, and seventh - National Health Investors Inc. (NHI) [5], Urstadt Biddle Properties Inc. (UBA) [6], and W.P. Carey Inc. (WPC) [7].

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

Finally, a consumer defensive sector representative placed ninth - Universal Corp. (UVV) [9] - complete the top ten July Dividend Achievers by yield.

Actionable Conclusions: (21-30) Ten Achiever Dogs Showed 5.23% To 29.01% Upsides, While (31) Ten More Showed Losses Of -0.43-13.15% By July 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 Estimated A 26.23% Advantage For 5 Highest Yield, Lowest Priced Dividend Achiever Dogs To July 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, top ten Dividend Achiever dogs selected 7/2/19 and showing the highest dividend yields represented four of the Morningstar eleven sector scheme.

Actionable Conclusions: (32) Analysts Predicted 5 Lowest-Priced Of Top Ten Highest-Yield Achiever Dogs Delivering 9.23% Vs. (33) 7.32% Net Gains By All Ten Come July 2020

Source: YCharts

$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Achiever kennel by yield were predicted by analyst 1-year targets to deliver 26.23% more net gain than $5,000 invested as $.5k in each of all ten. The second lowest-priced Dividend Achiever, Holly Energy Partners LP, was 23.57%.

Source: YCharts

The five lowest-priced dividend Achiever dogs as of July 2 were: Urstadt Biddle Properties, Holly Energy Partners, Enterprise Products Partners LP, PPL Corp., and Omega Healthcare Investors Inc. with prices ranging from $21.38 to $37.46.

Five higher-priced dividend Achievers for July 2 were: Universal Corp., ONEOK, Inc., Dominion Energy Inc., National Health Investors Inc., and W.P. Carey Inc. with prices ranging from $58.35 to $83.51.

This 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 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 www.indexarb.com, YCharts.com, finance.yahoo.com, and analyst mean target price by Thomson/First Call in YahooFinance. Dog photo: earthfare.com

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.