Seeking Alpha

Energy And Financials Were Top Dividend Boosters

|
Includes: APAM, AVAL, DKL, EVA, FNF, GLP, HESM, KRP, MPLX, PBFX, SIMO, SJR, USDP
by: Fredrik Arnold
Fredrik Arnold
Dividend investing, Growth, momentum, research analyst
Summary

Barron's publishes a weekly list of stocks announcing "dividend payment boosts" on the very last page of its financial data section. Here is your dog catcher 11/4/19 update.

Last week, Barron's listed 73 stocks boosting dividends. The hikes ranged $.0003 per month to $.50 per annum and ranged 0.4% to 1850.0% for this batch.

Energy, financial, industrial, and basic material sector stocks populated the high yield top ten; however, real estate, funds, communication services, healthcare, technology, and utilities also composed the second twenty.

Ten top dividend-boosting stocks ranged from 11.9% to 39.57% in net gains calculated from broker targets plus dividends less broker fees.

$5k invested in the lowest-priced five top-yield dividend-boosted dogs showed 9.57% less net-gain than that from $5k invested in all ten. Bigger higher-priced dividend-boosted dogs ruled this early November pack.

Foreword

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, these dividend-boosted batches are perfect for the Arnold dog catcher process. Here is your November 4 data from Barron's for 73 dividend-paying stocks supplemented by dog catcher analysis powered by YCharts.

Actionable Conclusions (1-10): Analysts Estimated 11.94% To 39.57% Net Gains For Ten Top Dividend-Boosted Stocks Come November 2020

Six of ten top dividend-boosted 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 these booster dogs was graded by Wall St. Wizards as 60% accurate.

Source: YCharts.com

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 November 4, 2020, were:

MPLX LP (MPLX) netted $395.62 based on the median target estimates from seventeen analysts plus dividends. The Beta number showed this estimate subject to risks 7% more than the market as a whole.

Kimbell Royalty Partners (KRP) was projected to net $395.62 based on the median target estimates from eight analysts plus dividends less broker fees. A Beta number was not available for KRP.

Hess Midstream Partners (HESM) was projected to net $223.91 based on dividends plus the median target price estimates from three analysts less broker fees. A Beta number was not available for HESS.

PBF Logistics (PBFX) was projected to net $200.41 based on the median target price estimates from six analysts plus annual dividend less broker fees. The Beta number showed this estimate subject to risks 18% less than the market as a whole.

Shaw Communications (SJR) was projected to net $175.33 based on the median target price estimates from sixteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 28% less than the market as a whole.

Grupo Aval Acciones y Valores SA (AVAL) was projected to net $171.59 based on dividends plus the median target price estimates by six analysts less broker fees. The Beta number showed this estimate subject to risk 2% below the market as a whole.

Delek Logistics Partners (DKL) was projected to net $151.31 based on dividends, plus the median target price estimates from three analysts less broker fees. The Beta number showed this estimate subject to risk 5% less than the market as a whole.

Silicon Motion Technology (SIMO) was projected to net $132.35 based on the median target price estimates from fourteen analysts plus dividends less broker fees. The Beta number showed this estimate subject to risks 1% over the market as a whole.

Enviva Partners (EVA) was projected to net $131.77 based on the median target price estimates from four analysts plus annual dividends less broker fees. The Beta number showed this estimate subject to risk 13% less than the market as a whole.

Fidelity National Financial Inc. (FNF) was projected to net $119.36 based on dividends plus the median target price estimates from seven analysts less broker fees. The Beta number showed this estimate subject to risks 17% under the market as a whole.

The average net gain in dividend and price was estimated at 20.97% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risks 19% less than the market as a whole.

Source: dailydogstuff.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".

73 Dividend Boosters By Target Gains

Source: YCharts.com

73 Dividend Boosters By Yield

Source: YCharts.com

Actionable Conclusions (12-21): 10 Top Dividend Booster Stocks By Yield

Top ten dividend boosted stocks reported in Barron's 11/4/19 by yield represented four of eleven Morningstar sectors plus one fund. Lone dog from the industrials sector placed first, USD Partners LP (USDP) [1]. The top among six energy dogs placed second, Kimbell Royalty Partners LP (KRP) [2]. The other five energy dogs placed third, fifth, sixth, seventh, and tenth: Delek Logistics Partners LP (DKL) [3]; MPLX LP (MPLX) [5]; Global Partners LP (GLP) [6]; PBF Logistics [7]; and Hess Midstream Partners LP (NYSE:HESM) [10].

Then, a single fund took fourth, Eaton Vance Global Income Builder NS (EVGBC) [4]. One financial services representative placed eighth, Artisan Partners Asset Management Inc. (APAM) [8]. Finally, the lone basic materials firm was placed ninth, Enviva Partners LP (EVA) to complete the November 4 top ten dividend boosted list, by yield.

Actionable Conclusions: (22-31) Top Ten November Dividend Boosted Dogs Showed 15.26%-47.79% Upsides While (31) One Downsider Emerged

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 9.57% Disadvantage For 5 Highest Yield, Lowest Priced Dividend Boosted Stocks To 2020

Ten top dividend booster dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.

Source: YCharts.com

As noted above, top ten dividend booster dogs screened as of 10/30/19 showing the highest dividend yields represented four of eleven Morningstar sectors and a fund.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield 11/4 Dividend Booster Dogs (32) Delivering 18.62% Vs. (33 ) 20.59% Net Gains by All Ten Come November 4, 2020

Source: YCharts.com

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten dividend booster kennel by yield were predicted by analyst one-year targets to deliver 9.57% less gain than $5,000 invested as $.5k in all ten. The seventh and ninth lowest priced selections, MPLX LP (MPLX) and Delek Logistics Partners LP (DKL), were projected by broker targets to deliver the best net gains of 39.57%.

Source: YCharts.com

The five lowest-priced top-yield dividend boosted dogs as of November 4 were: Eaton Vance Global Income Builder NS (EVGBC), USD Partners LP (USDP); Kimbell Royalty Partners LP (KRP); Global Partners LP (GLP); and Hess Midstream Partners LP (HESM), with prices ranging from $9.98 to $21.35.

Five higher-priced dividend boosted dogs as of November 4 were: PBF Logistics LP (PBFX); MPLX LP (MPLX); Artisan Partners Asset Management Inc. (APAM); Delek Logistics Partners LP (DEKL); and Enviva Partners LP (EVA), whose prices ranged from $21.77 to $34.14.

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 Dividend Boosted Batch stock purchase or sale research process. These were not recommendations.

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.

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.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb; YCharts; finance.yahoo; analyst mean target price by YCharts. Dog photo: dailydogstuff.com