8 Of The Top 10 Global Fortune 500 Dividend Dogs Are Ideal In October

Oct. 07, 2021 6:45 AM ETACGBY, BACHY, BP, CI, CICHY, GLNCY, HMC, LFC, MCK, PNGAY, SHEL, SHI, SNP, T, TM, VZ, WMT, XOM3 Comments9 Likes

Summary

  • August/September Fortune published the latest 500 "world's largest companies globally in 2020" (based on revenues) and 33 pay dividends.
  • "A pandemic couldn’t disrupt the top spot on the Fortune Global 500 for 2020. Mega-retailer, Walmart landed at number one on the list of the world's largest companies," Fortune states.
  • As of 10/5/21 the top-ten Global Fortune 500 dividend dogs ranged 4.70%-8.89% by annual yield and ranged 20.73%-51.24% per broker-estimated price-target upsides.
  • Top ten October Global Fortune 500 dividend dogs, MCK, CI, BP, TM, T, WMT, RDS.A, HMC, SNP, and LFC ranged 20.67% to 56.62% in one-year broker-estimated net gains.
  • $5k invested in the lowest-priced five of ten top-yield global Fortune 500 holdings showed 15.42% LESS net gain than from $5k invested in all ten. Bigger, higher-priced stocks led the Global Fortune 500 dividend pack by one and one-half lengths as of October 5.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

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Foreword

This article is based on one Fortune Magazine article detailing the 500 largest companies in the world by revenues as of 2020 in the August/September, 2021 edition.

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, these 50 Top Global Fortune 500 dogs are perfect for the dogcatcher process. Here are results from the September 2 data for 50 Global stocks in the collection. Of 50 listed, twelve were private, listed on foreign exchanges, or showed no pricing; thus leaving a USA viable list of 38 (of which 33 paid dividends).

The following 11 (as of October 5) lived up to the Dogcatcher ideal (of dividend income form $1k invested exceeding their single share prices): China Petroleum & Chemical Corp (SNP); Bank Of China Ltd (OTCPK:BACHY); Agricultural Bank of China Ltd (OTCPK:ACGBY); AT&T Inc (T); China Construction Bank Corp (OTCPK:CICHY); Sinopec Shanghai Petrochemical Co Ltd (SHI); China Life Insurance Co Ltd (LFC); BP PLC (BP); Ping An Insurance (OTCPK:PNGAY); Glencore PLC (OTCPK:GLNCY); Honda Motor Co Ltd (HMC). Some investors regard this ideal as a buy signal, or at least a look closer invitation.

Actionable Conclusions (1-10): Analysts Estimated 20.67% To 56.62% Net Gains For Ten Top Global Fortune 500 To October 5, 2022

Three of ten top 2021 Viable 38 Global Fortune 500 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, the yield-based forecast for these October dogs was graded by Wall St. Wizards as 30% accurate.

Estimated dividends from $1000 invested in each of the highest yielding stocks plus their aggregate one-year analyst median target prices, as reported by YCharts, formed the data points. Note: target prices from less than two analysts were not applied. Thus, ten probable profit-generating trades projected to October 5, 2022 were:

Source: YCharts.com

38 Global Fortune 500 stocks

China Life Insurance Co Ltd was projected to net $566.19, based on the two analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% over the market as a whole.

China Petroleum & Chemical Corp was projected to net $498.90, based on dividends, plus the median of the target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 16% less than the market as a whole.

Honda Motor Co Ltd was projected to net $260.21, based on dividends, plus median target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% less than the market as a whole.

Royal Dutch Shell PLC (RDS.A) was projected to net $253.56, based on the median of target estimates from fourteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 17% under the market as a whole.

Walmart Inc. (WMT) was projected to net $236.52, based on a median of target price estimates from thirty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 51% less than the market as a whole.

AT&T Inc. was projected to net $236.12, based on a median of target price estimates from twenty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 24% less than the market as a whole.

Toyota Motor Corp (TM) was projected to net $232.35, based on dividends, plus the median of target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 48% under the market as a whole.

BP PLC was projected to net $218.37, based on the median of target price estimates from thirteen analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% less than the market as a whole.

Cigna Corp (CI) was projected to net $213.87 based on dividends, plus the median of target estimates from twenty-four brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 11% less than the market as a whole.

McKesson Corp (MCK) was projected to net $206.74, based on dividends, plus the median of target price estimates from thirteen analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% greater than the market as a whole.

The average net gain in dividend and price was estimated at 29.14% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 21% less than the market as a whole.

Source: Open source dog art from dividenddogcatcher.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".

31 Global Fortune 500 Dogs Show October Target Gains

Source: YCharts.com

31 Global Fortune 500 Stocks Show October Target Gains Source

33 Global Fortune 500 Dogs Per September Yield

Source: YCharts.com

33 Global Fortune 500 Stocks Per September Yield

Actionable Conclusions (11-20): 10 Top Viable Fortune Global 500 Dogs By Yield For October

Top yield ten October 2021 Viable Global Fortune 500 stocks represented three of eleven Morningstar sectors.

First, sixth, and eighth places were occupied by energy sector representatives, China Petroleum & Chemical Corp [1], Sinopec Shanghai Petrochemical Co Ltd[6], and Exxon Mobil Corp (XOM)[8].

Then five financial services representatives placed second, third, fifth, seventh, and ninth, Bank Of China Ltd [2], Agricultural Bank of China Ltd [3], China Construction Bank Corp[5], China Life Insurance Co Ltd [7], and Ping An Insurance (Group) Co of China Ltd [9].

Finally, two communication services stocks placed fourth and tenth, AT&T Inc [4], and Verizon Communications Inc (VZ) [10] to complete the top ten October Viable Global Fortune 500 stocks by yield.

Actionable Conclusions: (21-30) Top -Ten Global Fortune 500 Dividend Dogs Showed 18.88%-51.59% Upsides With (31) No Lowly Down-siders in This October Report

Source: YCharts.com

Top Ten Global Fortune 500 Dividend Stocks

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

Analysts Forecast A 15.42% Disadvantage For The 5 Highest Yield, Lowest Priced Of Ten Global Fortune 500 Dividend Stocks Come October 2022

Yield (dividend / price) results provided by YCharts did the ranking for these ten dividend Fortune 500 Global revenue leaders.

Source: YCharts.com

Ten Global Fortune 500 Dividend Stocks Come October 2022

As noted above, top ten Usable Global Fortune 500 Stocks screened 10/5/21 showing the highest dividend yields represented three of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Viable Fortune Global 500 Dividend Dogs (33) Delivering 16.46% Vs. (34) 19.46% Net Gains by All Ten Come October, 2022

Source: YCharts.com

Top Ten Highest-Yield Viable Fortune Global 500 Dividend Stocks

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten dividend Usable Global Fortune 500 kennel by yield were predicted by analyst 1-year targets to deliver 15.42% less gain than $5,000 invested as $.5k in all ten. The eighth lowest-priced selection, China Petroleum & Chemical Corp, was projected to deliver the best net gain of 48.99%

Source: YCharts.com

38 Global Fortune 500 stocks

The five lowest-priced top-yield viable Global Fortune 500 dividend Dogs as of October 5 were: China Life Insurance Co Ltd; Bank Of China Ltd; Ping An Insurance (Group) Co of China Ltd; China Construction Bank Corp, with prices ranging from $8.18 to $14.15.

Five higher-priced viable Global Fortune 500 dividend Dogs as of October 5 were: Sinopec Shanghai Petrochemical Co Ltd; AT&T Inc; China Petroleum & Chemical Corp; Verizon Communications Inc; Exxon Mobil Corp, whose prices ranged from $25.02 to $61.62.

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.

Afterword

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

The following 11 Viable Global Fortune 500 dividend Dogs (as of October 5) lived up to the Dogcatcher: China Petroleum & Chemical Corp; Bank Of China Ltd; Agricultural Bank of China Ltd ; AT&T Inc; China Construction Bank Corp; Sinopec Shanghai Petrochemical Co Ltd; China Life Insurance Co Ltd; BP PLC; Ping An Insurance; Glencore PLC; Honda Motor Co Ltd. Some investors regard this ideal of having annual dividends from a $1K investment exceed their single share prices condition as a buy signal, or at least a look closer invitation.

To learn which of these twelve are 'safer' dogs, navigate to my Dividend Dogcatcher marketplace here on the Seeking Alpha marketplace site later this month, after October 12. There you'll find a follow-up 'safer' Top Global Fortune 500 dividend stock summary.

Since eight of the top ten Usable Global Fortune 500 dividend Dogs shares are now priced less than the annual dividends paid out from a $1K investment, the following charts compare those eight plus two at current prices (top chart) with the fair pricing of all ten top dogs conforming to that ideal (middle chart). The dollar and percentage differences between current and fair prices are detailed in the bottom chart.

Source: YCharts.com

Global Fortune 500 Stocks

Usable Fortune Global 500 Dividend Dogs By 2020 Revenues Ranking

Source: Fortune.com

Fortune Global 500 Dividend Stocks By 2020 Revenues

The List

A pandemic couldn't disrupt, the top spot on the Fortune Global 500 for 2020. Mega-retailer, Walmart landed at number one on the list of the world's largest companies by revenue for the eighth straight year.

With $57 billion in net income, Apple, at No. 6, regained the title of the Global 500's most profitable company (held by Saudi Aramco, the last two years). Amazon grew sales by more than $105 billion and jumped to No. 3. By contrast, Exxon Mobil sank to No. 23, its lowest ranking ever.

Of 50 listed, twelve were private, listed on foreign exchanges, or showed no pricing leaving a US viable list of 38 (of which 33 paid dividends).

Stocks listed above were suggested only as possible reference points for your 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 Thomson/First Call in YahooFinance. Open source dog art from dividenddogcatcher.com

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This article was written by

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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/we have a beneficial long position in the shares of T either through stock ownership, options, or other derivatives. 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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