All but nine equities and all of the funds listed in this July collection of monthly-paying dividend dogs live up to the ideal of annual dividends from $1K invested exceeding their single share price. Here, in the MoPay collection, lie affordable (yet volatile and risky) bargains. One metric ($1k Invested income>1 share price) fits all!
After the 2020 Ides of March dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may now be at hand.
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 Dogcatcher yield-based strategy for this MoPay group, as graded by broker estimates this month, proved 50% accurate.
Estimated dividend amounts from $1000 invested in each of the ten highest-yielding stocks plus analysts median 1yr target prices for those stocks, as reported by YCharts, produced the data points for the gains estimated below. Note: target prices from lone analysts were not applied (n/a). Ten probable profit-generating trades to July 2022 were:
Broadmark Realty Capital Inc (BRMK) netted $249.66 based on the median of target estimates from four analysts, plus estimated annual dividends less broker fees. A Beta number was not available for BMK.
Stellus Capital Investment (SCM) netted $212.33 based on the median of annual price estimates from four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% more than the market as a whole.
Dynex Capital Inc (DX) netted $167.16 based on the median of target price estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% over the market as a whole.
AGNC Investment Corp (AGNC) was forecast to net $158.78 based on the median of target price estimates from fifteen analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 2% greater than the market as a whole.
Ellington Financial Inc (EFC) netted $148.06, based on the median of target price estimates from eight analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 29% greater than the market as a whole.
Orchid Island Capital Inc (ORC) netted $138.00 based on dividends alone, less broker fees. The Beta number showed this estimate subject to risk/volatility 31% over the market as a whole.
Gladstone Commercial Corp (GOOD) netted $128.24 based on the median of target price estimates from six analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 3% over the market as a whole.
SLR Senior Investment Corp Ltd (SUNS) netted $123.91 based on the median of target estimates from three analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 41% over the market as a whole.
Cross Timbers Royalty Trust (CRT) netted $119.94 based on the median of annual price estimates from two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% more than the market as a whole.
PennantPark Floating Rate Capital LTD (PFLT) netted $87.24 based on the median of annual price estimates from six analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 104% greater than the market as a whole.
Average net gain in dividend and price was 15.33% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 47% greater than the market as a whole.
The probable losing trades revealed by Y-Charts to 2022 were:
Pembina Pipeline Corp (PBA) projected a loss of $70.69 based on its dividend and the median of target price estimates from twelve analysts including broker fees. The Beta number showed this estimate subject to risk/volatility 50% greater than the market as a whole.
Horizon Technology Finance Corp (HRZN) projected a loss of $114.35 based on its dividend and the median of target price estimates from five analysts including broker fees. The Beta number showed this estimate subject to risk/volatility 11% more than the market as a whole.
Prospect Capital Corp (PSEC) projected a loss of $198.36 based on its dividend and the median of target price estimates from two analysts including broker fees. The Beta number showed this estimate subject to risk/volatility 3% less than the market as a whole.
The average net loss in dividend and price was 12.78% on $3k invested as $1k in each of these three MoPay stocks. This loss estimate was subject to average risk/volatility 19% greater than the market as a whole.
Source: Open source dog art from dividenddogcatcher.com
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".
Three lists produce numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, July 9 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.
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. Numerous prominent MoPay firms declared dividend cuts between December 2016 and May 2020. Those reducing or curtailing dividends in May and June, 2020, included: Oxford Square Capital Corp; Partners Real Estate Investment Trust; Orchid Island Capital Inc; Cross Timbers Royalty Trust; H&R Real Estate Investment Trust; BTB Real Estate Investment Trust; American Finance Trust Inc; Mesa Royalty Trust; Solar Senior Capital Ltd; Ellington Financial Inc; Dividend Select 15 Corp; Chesswood Group Ltd; Sabine Royalty Trust; TORC Oil & Gas Ltd; Freehold Royalties Ltd; ARC Resources Ltd; Inter Pipeline Ltd; San Juan Basin Royalty Trust; Ag Growth International Inc.
Former MoPay top ten regular by yield. Bluerock Residential (BRG) announced December 2019 it was retreating to quarterly dividend payments "in keeping with industry tradition." That tradition continued with ARMOUR Residential REIT (ARR) and Stellus Capital Investment Corp both transitioned to QPay in June, 2020. Within three months, however, both SCM and ARR returned to MoPay mode.
Capitala Finance Corp (CPTA) cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017, then suspended it as of May 3, 2020. Oxford Square Capital (OXSQ), however, issued this nebulous statement regarding its pending monthly payments: "While no decision has yet been made with regard to the Company's common stock distributions for July, August and September, we believe that the Company's Board of Directors will likely elect to reduce or suspend the Company's distributions for those months." On June 2, 2020 the company declared $0.035 monthly distributions for July August and September, which have persisted.
Top yield stock for July, 2018, and June 2021, Orchid Island Capital, 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, to $0.08 in September, 2018, and to $0.055 for May, 2020. However in August. 2020 ORC monthly dividend increased from $0.06 to $0.065 for September, October, and into 2021.
The U.S. exchange MoPay segment is volatile, transitive, recovering, and adding members. More trades in monthly pay equities are available from Canadian firms, many of which are also listed on U.S. OTC exchanges. Active listed MoPays priced over $2 were up from 71 in October to 73 in February 2021, and now in July 2021 at the full strength of 86 active, not seen for years.
Top ten of these US exchange listed monthly pay dividend equities showing the best yields for June represented just four of the eleven Morningstar market sectors, with representative firms split 3, 1, 5 and 1 between the real estate, energy, financial services, and basic materials sectors.
First place went to the first of those three real estate equities, Orchid Island Capital .
The remaining two real estate representatives placed third, and ninth, ARMOUR Residential REIT Inc , and AGNC Investment Corp . A lone energy representative placed second by yield, Cross Timbers Royalty Trust .
Thereafter the top ten collection was packed by five financial services sector representatives placing fourth, fifth, seventh, eighth, and tenth: Ellington Financial Inc ; Dividend Select 15 Corp (OTCPK:DVVDF) ; Prospect Capital Corp ; PennantPark Floating Rate Capital Ltd ; Oxford Square Capital Corp (OXSQ) .
Finally, the lone basic materials sector representative in the top ten placed sixth, Chemtrade Logistics Income Fund, (OTC:CGIFF) which completed the July MoPay top ten equities list by yield.
The results shown below from YCharts for MoPay dividend stocks as of market closing price July 9 were compared with the median of analyst target prices one year-out. The ten top stocks displayed 1.06% to 18.04% price upsides for the next year based on those analyst 1 yr. targets.
Four (tinted) of 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: Broadmark Realty Capital Inc , Stellus Capital Investment , Dynex Capital Inc , AGNC Investment Corp , Gladstone Commercial Corp.
The lower level five were, Ellington Financial Inc , SLR Senior Investment Corp , Cross Timbers Royalty Trust , San Juan Basin Royalty Trust , and Pennant Park Floating Rate Capital Ltd .
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 to July 2022 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
Eighty top monthly dividend paying (MoPay) Closed End Funds, Exchange Traded Funds and Notes listed below were culled from nearly 800 candidates. Yields of 10.04% or greater calculated as of July 9 determined the top ten.
The top ten monthly paying dividend investment companies, funds, & notes showing the biggest yields for per YChart & YahooFinance data featured four uncollateralized debt instruments [ETNs], two open-ended investment companies [ETFs], and four closed-ended investment company [CEICs].
Four uncollateralized debt instrument companies (ETNs) placed first, through fourth: Credit Suisse X-Links Silver Covered Call ETN (SLVO) ; Credit Suisse X-Links Crude Oil Shares Covered Call ETN (USOI) ,Credit Suisse X-Links Gold Covered Call ETN (GLDI) , and Credit Suisse X-Links Monthly Pay 2x Leveraged Mortgage REIT ETN (REML) .
Finally, Four closed end investment companies (CEICs) placed sixth, and eighth to tenth, Oxford Lane Capital Corp (OXLC), Aberdeen Income Credit Strategies Fund (ACP) , First trust Senior FR income II (FCT) , and Highland Global Allocation Fund (HGLB)  to complete the top ten Exchange Traded Notes, Exchange Traded Funds, and Closed End Investment Companies list for July, 2021-22.
Note that the July 2021 top ten equity dividends are now priced 2% higher than those of the top ten funds. In June they were 1% higher. April and May equities were 2% higher. In March equities were 1% lower, and February saw equities 1% higher than the funds. In January they were equal, October to December they were 1% lower, and August and September had them 1% higher. Those two months in the fall of 2020 were the first time equities showed prices higher than funds in over a year. The price differences are likely found in management fees collected in the fund world and the price of risk/volatility.
Since June 2012 readers suggested to include these 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 & hold in November. Another list factored December 2012 reader comments.
Now we have a new decade of 2020 that began last January, and continued in February, March, April, early May, and mid May, June, July, August, September, October, November, December. The progression continued in 2021 in January, February, March, April, May, June, and now July. We compare and contrast MoPay equity upside potential to the yield (and higher risk/volatility) should one be tempted to buy and hold Closed End Investments or Exchange Traded Funds and Notes.
Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and YahooFinance, produced the following charts.
$5000 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 48.81% more net gain than $5,000 invested as $.5k in all ten. The ninth lowest-priced MoPay dividend dog, AGNC Investment Corp, was predicted to deliver the best net gain of 15.88%.
Lowest priced five MoPay dividend stocks estimated as of July 9 were: Oxford Square Capital Corp; Orchid Island Capital Inc; Chemtrade Logistie Income Fund; Dividend Select 15 Corp; Prospect Capital Corp, with prices ranging from $4.97 to $8.28.
Higher priced five MoPay dividend equities estimated as of July 9 were: Cross Timbers Royalty Trust; ARMOUR Residential REIT Inc (ARR); PennantPark Floating Rate Capital Ltd; AGNC Investment Corp; Ellington Financial Inc, whose prices ranged from $11.46 to $18.22.
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 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.
If somehow you missed the suggestion of the stocks ripe for picking at the start of this article, here is a reprise of the list at the end:
(Alphabetical by Ticker)
All but nine equities and all of the funds listed in this July collection of monthly-paying dividend dogs live up to the ideal of annual dividends from $1K invested exceeding their single share price. Here in the MoPay collection lie affordable yet volatile and risky bargains.
After the past 2020 Ides of March dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may now be at hand.
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. Open source dog art from dividenddogcatcher.com
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.