November's U.S. monthly-paid (MoPay) dividends, upsides, and net gains: 1. Stocks by yield (90); 2. Stocks by price-upside (30); 3. Closed-End-Investments, Exchange-Traded-Funds & Notes (CEICs/ETFs/ETNs) by yield >7% (80).
U.S. MoPay equities are neither bigger nor better. Canadian MoPays are omitted, but many Canadian firms are U.S. listed OTC. CEICs/ETFs/ETNs are combined and limited to yields over 7.3%.
Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs.Equities; 4. Fund risks/rewards. All per prices as of 10/24/19.
Analyst annual-targets revealed that investing $5k in the lowest priced five of ten top yield MoPay US exchange equities produced 53.6% LESS gain than $5k invested in all ten.
Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities To Net 13.9% to 94.12% Gains By November 2020
Six of the ten top-yield MoPay stocks (shaded in the chart below) were verified as being among the top-ten gainers for the coming year based on analyst one-year target prices. Thus, the yield-based strategy for this MoPay group, as graded by broker estimates for this month, proved 60% accurate.
Projections based on estimated dividend amounts from $1000 invested in each of the ten highest yielding stocks and the one year analyst median target prices for those stocks, as reported by YCharts, made the data points. Note: one-year target prices from one analyst were not applied (n/a). Ten probable profit-generating trades to 2020 were:
ARC Resources Ltd. (OTCPK:AETUF) netted $941.20 based on the median of target estimates from fifteen analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk 2% over the market as a whole.
PermRock Royalty Trust (PRT) was forecast to net $898.65 based on the median of target price estimates from three analysts plus dividends less broker fees. A Beta number was not available for PRT.
Vermilion Energy Inc. (VET) netted $666.12 based on dividends plus the median of annual price estimates from fifteen analysts less broker fees. The Beta number showed this estimate subject to risk 19% more than the market as a whole.
Great Elm Capital Corp. (GECC) netted $418.12 based on dividend, plus the median of target prices estimated by two analysts, less broker fees. A Beta number was not available for GECC.
Colony Credit Real Estate (CLNC) netted $406.55 based on a median target price estimates from eleven analysts, plus dividends less broker fees. A Beta number was not available for CLNC.
Capitala Finance Corp. (CPTA) netted $353.44 based on a median of target price estimates from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 18% more than the market as a whole.
PennantPark Floating Rate (PFLT) netted $216.39 based on a median of target price estimates from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk 27% less than the market as a whole.
ARMOUR Residential REIT (ARR) netted $187.40 based on dividends plus the median of annual price estimates from five analysts less broker fees. The Beta number showed this estimate subject to risk 33% less than the market as a whole.
Orchid Island Capital (ORC) netted $153.80, based on dividend alone less broker fees. The Beta number showed this estimate subject to risk 51% less than the market as a whole.
Permianville Royalty Trust (PVL) netted $139.10 based on dividend alone less broker fees. The Beta number showed this estimate subject to risk 28% more than the market as a whole.
Average net gain in dividend and price was 43.84% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk 6% less than the market as a whole.
Actionable Conclusion (11): (Bear Alert) Analysts Anticipated One MoPay Dog To Lose 7.74% By November 2020
The probable losing trade revealed by YCharts was:
Sabine Royalty Trust (SBR) cast a loss of $77.39 based on dividend and a projected target price estimate based on the median of projected target price estimates from two analysts, including $10 of broker fees. The Beta number showed this estimate subject to volatility 47% less than the market as a whole.
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 specifically, these are, in fact, best called "underdogs".
November Monthly Pay Dividend Data
Three lists produced numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, October 24 closing prices and estimated annual dividends were referenced from YCharts. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) a high yield (and higher risk) MoPay CEICs/ETFs/ETNs list. Note: Y charts data policy retains frequency of pay status on its lists for one year after termination.
Monthly Pay Dividend Qualities
Quarterly, Semi-Annual and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.
Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one-third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.
This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Three prominent MoPay firms declared dividend cuts between December 2016 and July 2019.
Former MoPay top ten regular by yield. Blue Bluerock Residential (BRG) announced in December it is retreating to quarterly dividend payments "in keeping with industry tradition."
Third, Capitala Finance Corp. (CPTA) cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017.
For the past year, Tahoe Resources (TAHO) has skipped its monthly payouts and has dropped out as a MoPay resource.
Top yield stock for October 2016, Orchid Island Capital (ORC), released this cautionary note with its monthly dividend announcements: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back up their words with actions cutting the dividend from $0.14 to $0.11 in February, to $0.09 in March, and to $0.08 for September 2018.
Recently, in July 2019, ARMOUR Residential REIT (ARR) cut its payout from $0.19 to $0.17.
Upon inspection, the August 2019 YCharts equity list was pared down by removing four former MoPay members: JMP Group (JMP); San Juan Trust (SJT); Dividend Select 15 Corp. (OTCPK:DVVDF); Global Net Lease (GNL). This November list scrubbed Pacific Coast Oil Trust (ROYT), which announced curtailment of its dividend as of October.
The U.S. MoPay segment is volatile, transitive, and shrinking. More over-the-counter trades in monthly pay equities are available from Canadian firms, many of which are picking up U.S. OTC authorization.
Most Readers like MoPays:
"[Y]ou list a few issues here whose distributions are rife with RETURN OF CAPTAL [ROC] at its most destructive form, funds that pay you back your own money each and every month in their distributions with no regard to what they truly earn...- these should not be included in any list containing the word "dividend". - NYer1
"I can enter or exit a position and still reap dividends for at least 2/3s of the quarter. They also smooth the income stream so I have cash at any given time to make a purchase at dips." - Ed Invests
"...Nice to see another contrarian strategy. This one seems to take a lot of attention in comparison [to Dow dogs], but I like the monthly rebalance." - colodude
"At this level of risk, I'm only buying monthly dividend payers. Dividend if cut only [sits] for a month and not a quarter." - Sinjjn Smythe
"...love those monthly payers." - Hardog
"Some of us are comfortable investing in Dog stocks because we feel the reward is worth the risk. As long as [my sin stock] continues to pay and raise the dividend like it has for 16 years now, it will have a spot in my portfolio." - Miz Magic DiviDogs
"One thing to point out: These stocks are not buy & hold. If you buy any of these stocks, set a price where you will sell... trailing stops work real good & with mopays you can get out & get back in without losing a whole quarter of dividends..." - drking
List One: 90 US Monthly Pay Dividend Equities by Yield
Top ten of these US exchange listed monthly pay dividend equities showing the best yields into October represented four of the eleven Morningstar market sectors, with representative firms split 4, 3, 1 to 2 between the real estate, energy, healthcare, and financial services sectors.
The first of four real estate sector representatives led the top ten by yield, Orchid Island Capital Inc. (ORC) . The other three real estate dogs placed seventh, through ninth: American Hotel Income Properties REIT LP (AOTF) , ARMOUR Residential REIT Inc. (ARR) , and Colony Credit Real Estate Inc. (CLNC) .
The lone healthcare representative placed third, Medical Facilities Corp. (OTCPK:MFCSF) .
Finally, two financial services representatives placed fourth and tenth, Oxford Square Capital Corp (OXSQ) , and Capitala Finance Corp (CPTA) , to complete the November MoPay top ten list by yield.
List Two: Monthly Pay Dividend Equities by Price Upside
The results shown below from YCharts for MoPay dividend stocks as of market closing price October 24 were compared with analyst median target prices one year out. The ten top stocks displayed 3.0% to 63.62% price upsides for the next year based on analyst 1 yr. targets.
Five of the ten (tinted) on this price upside list were members of the top ten list by yield. The first five places on this upside list went to: ARC Resources Ltd. (OTCPK:AETUF) , PermRock Royalty Trust (PRT) , Vermilion Energy Inc. (VET) , Great Elm Capital Corp. (GECC) , Colony Credit Real Estate Inc. (CLNC) .
The lower level five were Capitala Finance Corp. (CPTA) , PennantPark Floating Rate Capital Ltd. (PFLT) , ARMOUR Residential REIT Inc. (ARR) , Permianville Royalty Trust (PVL) , and Ellington Financial Inc. (EFC) .
Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.
Those ten MoPay stocks showing the highest upside price potential into 2020 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
List Three: Monthly Pay Dividend Closed End Investment Companies, Exchange Traded Funds, and Notes, by Yield
Eighty top monthly dividend paying (MoPay) Closed End Funds, Exchange Traded Funds and Notes listed below were culled from nearly 800 candidates. Yields greater than 11.95% calculated as of October 24 determined the top ten.
The top ten monthly paying dividend investment companies, funds, and notes showing the biggest yields for per YChart and Yahoo Finance data featured seven uncollateralized debt instruments [ETNs], and three closed-ended investment companies [CEICs].
Uncollateralized debt instruments (ETNs) captured the first, through fifth, seventh, and ninth positions: Credit Suisse X-LinksMP2xLvgMortREIT ETN (REML) ; UBS ETRACS M Py 2xLvg MortgREIT ETN SerB (MRRL) ; UBS ETRACS Mthly Py 2xLvg Mortg REIT ETN (MORL) ; UBS ETRACS M Py 2xLvg US Sm Cp HiDiv ETN (SMHD) ; UBS ETRACS Mthly Py 2xLvg Closed-End ETN (CEFL) ; UBS ETRACS M Py 2xLvg Divers Hi Inc ETN (DVHL) ; UBS ETRACS M Py 2xLvg WF MLP Ex-Engy ETN (LMLP) .
Finally, three closed-end investment companies placed sixth, eighth, and tenth, Oxford Lane Capital (OXLC) , Aberdeen Income Credit Strategies Fund (ACP) , and Miller/Howard High Income Equity (HIE) . This completed the top ten Exchange Traded Notes, Exchange Traded Funds, and Closed End Investment Companies list for November 2019.
Compare Equity To Fund Performance
Note that the top ten equity dividends are again priced 2% less those of the top ten funds. This is a variation for October 2019 they were 1% less. For September, equities were also 2% under funds, but in August, they were equal. The difference is likely found in management fees collected in the fund world.
Background and Actionable Conclusions
Since June 2012, reader suggestions to include funds, trusts, and partnerships, a list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. That list was supplemented by an upside potential article in October and an upside vs. buy & hold in November. Another list factored December 2012 reader comments.
Again last year, the 2018 articles in January, February, March, April, May, June, July, August, September, and October/November, and December. Now, we have a new year of 2019 articles in January, February, March, April, May, June, July, August, September, and October continuing to compare and contrast MoPay equity upside potential to the now lower yield (but higher risk) buy and hold Exchange Traded Funds and Notes.
Yield Metrics Found No Advantage For Five Lowest Priced Of Ten High Yield MoPay Equities
Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and Yahoo Finance, produced the following charts.
Actionable Conclusions: Analysts Estimated 5 Lowest Priced of Top Ten High Yield MoPay Dividend Stocks (12) Would Produce 10.46% Vs. (13) 22.56% Net Gains from All Ten by November 2020
$5,000 invested as $1k in each of the five Lowest priced stocks in the top ten MoPay dividend dog kennel by yield were predicted by analyst 1 year targets to deliver 53.62% LESS net gain than $5,000 invested as $0.5k in all ten. The ninth lowest priced MoPay dividend dog, Vermilion Energy Inc (VET), was predicted to deliver the best net gain of 66.61%.
Lowest priced five MoPay dividend stocks estimated as of October 24 were: Permianville Royalty Trust (PVL); American Hotel Income Properties REIT LP (OTC:AHOTF); Orchid Island Capital Inc. (ORC); Oxford Square Capital Corp (OXSQ); Medical Facilities Corp. (OTCPK:MFCSF), with prices ranging from $2.17 to $16.82.
Higher priced five MoPay dividend equities estimated as of October 24 were: Mesa Royalty Trust (MTR); Capitala Finance Corp. (CPTA); Colony Credit Real Estate Inc. (CLNC); Vermilion Energy Inc. (VET); ARMOUR Residential REIT Inc. (ARR), whose prices ranged from $7.79 to $16.82.
This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, may someday be usable to find rewarding dogs in the MoPay Stock kennel.
The added scale of projected gains based on analyst targets contributed 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. It is also the work analysts got paid big bucks to do.
Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.
Gains/declines as reported do not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
Stocks listed above were suggested only as decent starting points for your MoPay dividend stock purchase or sale research process. These were not recommendations.
Graphs and charts were compiled by Rydlun & Co., LLC from data derived from ycharts; dividend.com; Yahoo Finance; analyst mean target price by YCharts. Dog Photo: fourmuddypaws.com.
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Disclosure: I am/we are long MFCSF. 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: 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.