New Benjamin Graham List Names, 3 Ideal Dogs For March

Summary

• These 70 Graham Stocks were screened for revenue, assets, long-term-debt, and EPS growth as of Feb. 25, 2021, based on Graham's established criteria.
• Of the 70, representing all eleven Morningstar Sectors, 40 pay dividends. Broker targeted top 10 Graham dividend-paying net-gainers ranged 9.08%-26.73% topped by RGR and DHI as of 2/25/21.
• By yield, PGR now leads all top 10 Graham yields from TRV, FAST, TROW, HSCG, WSO, ABBV, GPLI, RGR, SAFT, UVE, & PGR. The ten averaged 3.57%. Graham's top 10 by broker target price upsides from JBSS, NVR, NTGR, JOUT, CRUS, DHI, SMCI, IPGP, FB, and HOFT averaged 27.18%, per analyst estimates.
• $5k invested February 25 in the five top-yield lowest-priced Graham stocks showed 12.7% more net-gain than from $5k invested all the top ten. Little (lower-priced) equities lead these new February 40 Graham Dividend stocks.
• Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Get started today »

Foreword

While more than 90% of this collection of now 40 Graham Dividend stocks are too pricey to justify their skinny dividends, three of the top 10 by yield live up to the ideal of offering annual dividends (from a $1K investment) exceeding their price per share.

In the current market advance, it's still possible for Universal Insurance Holdings Inc (UVE), Sturm, Ruger & Company (RGR), and Healthcare Services Group Inc (HCSG), to stay fairly priced with their annual yield (from $1K invested) meeting or exceeding their single share prices at this time.

As we approach the anniversary of the 2020 Ides of March dip, the time to snap up those three top yield Graham dogs is now - unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your position in any of the five you then hold.)

Actionable Conclusions (1-10): Analysts Predict 9.08% To 26.73% Top Ten Graham Net Gains To February, 2022

Three of the 10 top Aristocrats by yield were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices. (They are tinted gray in the chart below). Thus, this yield-based March forecast for Graham dividend stocks (as graded by Brokers) was 30% accurate.

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, created the 2020-21 data points. Note: target prices by lone analysts were not applied. Ten probable profit-generating trades projected to Feb. 25, 2022, were:

Source: YCharts.com

D.R. Horton Inc (DHI) was projected to net $267.30, based on a median of target estimates from twenty-three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 64% greater than the market as a whole.

Sturm Ruger & Co Inc was projected to net $223.51 based on dividends, plus the median of target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 67% less than the market as a whole.

SEI Investments Co (SEIC) was projected to net $192.22, based on dividends, plus the median of target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 11% greater than the market as a whole.

Lennar Corp (LEN) netted $180.26 based on a median target price estimate from twenty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 51% more than the market as a whole.

Progressive Corp (PGR) was projected to net $167.87, based on a median target price estimate from nineteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 63% less than the market as a whole.

Evercore Inc (EVR) was projected to net $146.04, based on the median of target price estimates from nine analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 70% more than the market as a whole.

Skyworks Solutions Inc (SWKS) was projected to net $138.68, based on target price estimates from twenty-eight analysts, plus annual dividend, less broker fees. The Beta number showed this estimate is subject to risk/volatility 16% more than the market as a whole.

Graco Inc (GGG) was projected to net $114.95, based on the median of target price estimates from eleven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 41% less than the market as a whole.

Healthcare Services Group was projected to net $96.58, based on dividends, plus the median of target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 58% less than the market as a whole.

Franklin Electric Co Inc (FELE) was projected to net $90.81, based on dividends, plus the median of target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 1% greater than the market as a whole.

The average net gain in dividend and price was estimated to be 16.18% on $10k invested as $1k in each of these ten stocks. The average Beta showed these estimates subject to risk/volatility equal to the market as a whole.

source: parade.pet

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 50 Dividend Graham Stocks By Broker Targets

Source: YCharts.com

This scale of broker-estimated upside (or downside) for stock prices provides a scale of market popularity. Note: No broker coverage or 1 broker coverage produced a zero score on the above scale. This scale can be taken as an emotional component as opposed to the strictly monetary and objective dividend/price yield-driven report below. As noted above, these scores may also be taken as contrarian.

Top 50 Dividend Graham Stocks By Yield

Source: YCharts.com

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The March Dogs of The Graham Dividend Folio

Top ten Graham stocks selected 2/25/20 by yield represented three of eleven Morningstar sectors. In first place was Progressive Corp [1], the first of six financial services representatives listed. The others placed second, third fifth, eighth and tenth, Universal Insurance Holdings Inc [2], Safety Insurance Group Inc (SAFT) [3], Global Indemnity Group LLC [5] (GBLI), T. Rowe Price Group Inc (TROW) [8], and the Travelers Companies Inc. (TRV) [10].

Three industrials representatives placed fourth, sixth, and ninth, Sturm, Ruger & Company [4], Watsco Inc (WSO) [6], and Fastenal Co (FAST) [9].

Finally, one healthcare firm placed seventh, Healthcare Services Group Inc [7], and completed these Graham Dividend top ten, by yield, for March.

Source: YCharts.com

Actionable Conclusions: (21-30) Ten Graham Dividend Stocks Showed 9.15% To 26.66% Upsides To March, 2022; (31) On The Downside Were Two -0.4%-2.22% Losers

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

Analysts Estimated A 12.7% Advantage For 5 Highest Yield, Lowest Priced of Top Ten Graham Dividend Stocks To March, 2022

Ten top Graham stocks were culled by yield for this monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

Source: YCharts.com

As noted above, top 10 Graham Dogs selected 2/25/21 showing the highest dividend yields represented three of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Graham Dividend Stocks (32) Delivering 8.9% Vs. (33) 7.9% Net Gains by All Ten by February 25, 2022

Source: YCharts.com

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Graham Dividend folio by yield were predicted by analyst 1-year targets to deliver 12.7% more gain than $5,000 invested as $.5k in all ten. The fifth lowest priced Graham top yield stock, Sturm, Ruger & Company, was projected to deliver the best net gain of 22.35%.

Source: YCharts.com

The five lowest-priced top-yield Graham Dividend s stocks for February 25 were: Universal Insurance Holdings; Healthcare Services Group Inc; Global Indemnity Group Inc; Fastenal Co; Sturm, Ruger & Company Inc, with prices ranging from $13.88 to $68.78

The five higher-priced top-yield Graham Dividend stocks for February 25 were: Safety Insurance Group Inc; Progressive Corp; The Travelers Companies Inc; T. Rowe Price Group Inc; Watsco Inc, whose prices ranged from $82.58 to $246.40.

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.

Afterword

If somehow you missed the suggestion of the three stocks ripe for picking at the start of the article, here is a repeat of the list at the end:

In the current market advance, it is still possible for Universal Insurance Holdings Inc (UVE), Sturm, Ruger & Company (RGR), & Healthcare Services Group Inc (HCSG), to stay fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices at this time.

As we approach the anniversary of the 2020 Ides of March dip, the time to snap up those three top yield Graham dogs is now... unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your position in any of the three you then hold.)

Source: YCharts.com

Since three of the top Graham Dividend shares are now priced less than the annual dividends paid out from a $1K investment, the following charts compare those three plus seven at current prices (top chart) with the fair pricing of all ten top dogs conforming to that ideal (bottom chart).

Graham Dividend Dogs Alphabetical by Ticker Symbol

Source: YCharts.com

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 Aristocrats 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; analyst mean target price by YCharts.

Analyst’s 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.