86 Monthly Paying Top-Yield Dividend Dogs And 80 Funds For December

Nov. 26, 2019 11:51 AM ETACP, AETUF, AHOTF, ARR, BRG, CEFL, BRSP, LRFC, DVHL, DVVDF, EFC, GECC, GNL, HCAP, CFG, LMLP, MORL, MRRL, MTR, ORC, OXLC, OXSQ, PFLT, PRT, REML, ROYT, SJT, SMHD, TAHO, USOI, VET5 Comments10 Likes

Summary

  • December's U.S. monthly-paid (MoPay) dividends, upsides, and net-gains: Stocks by yield (96); stocks by price-upside (30); closed-end-investments, exchange-traded-funds and 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 7.59%.
  • Items: top MoPay stock gains; overall best MoPay gainers; funds vs. equities; fund risks/rewards. All per prices as of 11/22/19.
  • Analyst annual-targets revealed that investing $5k in the lowest-priced five of ten top yield MoPay US exchange equities produced 6.61% more gain than $5k invested in all ten.
  • This idea was discussed in more depth with members of my private investing community, The Dividend Dog Catcher. Get started today »

Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities To Net 16.38% to 74.39% Gains By December 2020

Five 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 50% accurate.

Projections based on estimated dividend amounts from $1,000 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 single analysts were not applied (n/a). Ten probable profit-generating trades to 2020 were:

Source: YCharts

ARC Resources Ltd. (OTCPK:AETUF) netted $743.85 based on the median 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 $678.02 based on the median target estimates from two analysts plus dividends less broker fees. A Beta number was not available for PRT.

Vermilion Energy Inc. (VET) netted $406.10 based on dividends plus the median annual price estimates from sixteen analysts less broker fees. The Beta number showed this estimate subject to risk 17% more than the market as a whole.

Colony Credit Real Estate (CLNC) netted $395.18 based on the median target estimates from two analysts plus dividends less broker fees. A Beta number was not available for CLNC.

Capitala Finance Corp. (CPTA) netted $344.91 based on the median target estimates from six analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk 17% more than the market as a whole.

Great Elm Capital Corp. (GECC) netted $330.48 based on dividend plus the median of target prices estimated by two analysts less broker fees. A Beta number was not available for GECC.

PennantPark Floating Rate (PFLT) netted $191.40 based on the median target estimates from six analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk 28% less than the market as a whole.

Harvest Capital Credit (HCAP) netted $181.57 based on dividends plus the median annual price estimates from two analysts less broker fees. The Beta number showed this estimate subject to risk 33% less than the market as a whole.

ARMOUR Residential REIT (ARR) netted $176.79 based on dividends plus the median 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.

Ellington Financial (EFC) netted $163.78 based on dividends plus the median annual price estimates from seven analysts less broker fees. The Beta number showed this estimate subject to risk 61% less than the market as a whole.

Average net gain in dividend and price was 36.12% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk 17% less than the market as a whole.

Source: topdogtips.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 specifically, these are, in fact, best called "underdogs".

December 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: YCharts 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. 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.

Tahoe Resources (TAHO) has skipped its monthly payouts and has dropped out as a MoPay resource in 2018.

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 in 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); Global Net Lease (GNL); Dividend Select 15 Corp. (OTCPK:DVVDF). However, you will note DVVDF is back having merely skipped its August payout.

The November list scrubbed Pacific Coast Oil Trust (ROYT) which announced curtailment of its dividend as of October.

The U.S. exchange 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 CAPITAL [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

"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:

86 US Exchange-Traded Monthly Pay Dividend Equities by Yield

Source: YCharts

Top ten of these US exchange-listed monthly pay dividend equities showing the best yields into December represented three of the eleven Morningstar market sectors, with representative firms split 3, 4, to 3, between the real estate, financial services, and energy sectors.

The first of three real estate sector representatives led the top ten by yield, Orchid Island Capital Inc. (ORC) [1]. The other two real estate dogs placed fifth and eighth - American Hotel Income Properties REIT LP (OTC:AHOTF) [5] and ARMOUR Residential REIT Inc. (ARR) [8].

Then, four financial services representatives placed second, sixth, ninth, and tenth, Oxford Square Capital Corp. (OXSQ) [2], Great Elm Capital Corp. (GECC) [6], Capitala Finance Corp. (CPTA) [9], and Dividend Select 15 Corp. (OTCPK:DVVDF) [10].

Finally, energy equities took the three remaining slots, placing third, fourth, and seventh: Vermilion Energy Inc. (VET) [3]; PermRock Royalty Trust (PRT) [4]; Mesa Royalty Trust (MTR) [7], to complete the December 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 November 22 were compared with analyst median target prices one-year out. The ten top stocks displayed 6.66% to 65.98% price upsides for the next year based on analyst one-year targets.

Source: YCharts

Three (tinted) of the ten 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) [1], PermRock Royalty Trust (PRT) [2], Colony Credit Real Estate Inc. (CLNC) [3], Vermilion Energy Inc. (VET) [4], Capitala Finance Corp. (CPTA) [5].

The lower level five - Great Elm Capital Corp. (GECC) [6], PennantPark Floating Rate Capital Ltd. (PFLT) [7], Harvest Capital Credit Corp. (HCAP) [8], Ellington Financial Inc. (EFC) [9], and ARMOUR Residential REIT Inc. (ARR) [10].

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 12.7% calculated as of November 22 determined the top ten.

Source: YCharts

The top ten monthly-paying dividend investment companies, funds, and notes showing the biggest yields per YCharts and Yahoo Finance data featured eight uncollateralized debt instruments [ETNs], and two closed-ended investment companies [CEICs].

Source: YCharts

Uncollateralized debt instruments (ETNs) captured the first, through fourth, and sixth, through ninth, positions: UBS ETRACS M Py 2xLvg US Sm Cp HiDiv ETN (SMHD) [1]; UBS ETRACS M Py 2xLvg MortgREIT ETN SerB (MRRL) [2]; UBS ETRACS Mthly Py 2xLvg Mortg REIT ETN (MORL) [3]; Credit Suisse X-LinksMP2xLvgMortREIT ETN (REML) [4]; Credit Suisse X-Lnks Crde OlShrsCvCllETN (USOI) [6]; UBS ETRACS Mthly Py 2xLvg Closed-End ETN (CEFL) [7]; UBS ETRACS M Py 2xLvg Divers Hi Inc ETN (DVHL) [8]; UBS ETRACS M Py 2xLvg WF MLP Ex-Engy ETN (LMLP) [9].

Finally, two closed-end investment companies were placed fifth and tenth - Oxford Lane Capital (OXLC) [5] and Aberdeen Income Credit Strategies Fund (ACP) [10]. This completed the top ten exchange-traded notes, exchange-traded funds, and closed-end investment companies list for December 2019.

Compare Equity To Fund Performance

Source: YCharts

Note that the top ten equity dividends are again priced 2% less than those of the top ten funds. This is a continuation from November 2019, but, in October, 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 and the price of risk.

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 a upside vs. buy and hold in November. Another list factored December 2012 reader comments.

In January, February, March, April, May, June, July, August, September, October, November, and December 2013 readers contributed.

Reader suggestions continued in 2014 following the January, February, March, April, May, June, July, August, September, October, November, and December articles.

2015 continued with readers contributing in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2016 articles in January, February, March, April, May, June, July, August, September, October, November, and December.

The 2017 articles of January, February, March, April, May, June, July, August, September, October, November, and December.

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, October, and November 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 An Advantage For Five Lowest Priced Of Ten High Yield MoPay Equities

Source: YCharts

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 (11) Would Produce 27.27% VS. (12) 25.58% Net Gains from All Ten by November 2020

Source: YCharts

$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 one-year targets to deliver 6.61% more net gain than $5,000 invested as $.5k in all ten. The fifth lowest priced MoPay dividend dog, PermRock Royalty Trust (PRT), was predicted to deliver the best net gain of 67.8%.

Source: YCharts

Lowest priced five MoPay dividend stocks estimated as of November 22 were: Dividend Select 15 Corp. (OTCPK:DVVDF); American Hotel Income Properties REIT LP (OTC:AHOTF); Oxford Square Capital Corp. (OXSQ); Orchid Island Capital Inc. (ORC); PermRock Royalty Trust (PRT), with prices ranging from $4.75 to $5.80.

Higher priced five MoPay dividend equities estimated as of November 22 were: Mesa Royalty Trust (MTR); Great Elm Capital Corp. (GECC); Capitala Finance Corp. (CPTA); Vermilion Energy Inc. (VET); ARMOUR Residential REIT Inc. (ARR), whose prices ranged from $7.69 to $16.97.

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.

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.ycharts.com; www.dividend.com; finance.yahoo.com; analyst mean target price by YCharts. Dog Photo: topdogtips.com

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This article was written by

Fredrik Arnold profile picture
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Simple, straightforward 7-step analysis that finds lucrative income stocks.
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators. These are essential tools for catching the most valuable dividend dogs. My dividend dogcatcher premium site in the Seeking Alpha Marketplace shows annual real-time trading results since 2015.
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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.

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