October Readers Noted 32 Ideal Dividend Dogs, Primed To Buy

Summary

• September 23-October 24, 2021 readers mentioned 42 equities in their comments. Some lamented bad-news, so bad-news investments (rogues) mixed with (mostly) favorites. (Thus, these are the ReFa/Ro.).
• Ten analyst-target-estimated TOP-NET-GAIN reader faves & rogues, QIWI, IEP, IMBBY, BTI CHMI, EPD, MAGS, LTC, HQH, & T averaged 39.21% net gains from data collected 9/30/21.
• Ten analyst-target-augured TOP-PRICE-UPSIDE reader faves & rogues (ReFa/Ro) were: DX, PNNT, T, LTC, CHMI, EPD, KNOP, BTI, IEP, IMBBY, and QIWI boasting a 29.46% average target price upside estimate.
• By YIELD, the following ReFa/Ro made the top ten: OXLC; BHP; FSK; QYLD; CHMI; USAC; QIWI; IEP; HQH; MAGS. They averaged 15.39% annual yield. (Three made all-three lists: CHMI, IEP, and QIWI).
• $5k invested in the lowest-priced five of these top-yield ReFa/Ro dividend dogs showed 27.84% more net-gain than from $5k invested in all ten. The little (lower-priced) ReFa/Ro dogs stretched their lead on this pack into November.
• Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

Reader Selections

Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a reader favorite listing in this series of articles. Thus, It is possible that only rogues and discontinued, or dreadful, doubtful dividend issues may appear.

Lately readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however praise the effort to sort promising opportunities out of the thousands of dividend offers. After all, yield counts when searching for dividend winners.

Furthermore, my dog catching is, by method, a contrarian investing strategy and that can rub some investors the wrong way. It is most useful for new buyers; intended to guide readers to new purchases of dogs on the dips.

Most valuable to the writer, however, are those reader comments that truly catch errors in my calculations or changes in direction. Examples like the reader who missed my "safer" dividend follow-up articles because they contain dividend payout ratios. There are also those who catch flagrant fouled stock lists not synchronized with the data charted. This month a reader discovered a 'Safer' net gain chart posing as a Monthly Pay chart that even Seeking Alpha Editors missed. Every month some discover errant ticker symbols.

This month readers continued to complain about AT&T's impending dividend cut. Last month one suggested that executive pay at AT&T be slashed by the same percentage as the dividend cut. From a dogcatcher perspective there is ample room to slice the AT&T dividend. With the T share price under $30 and a dividend yield over 7%, the T dividend could be cut in half and still be a handsome attraction for new investors even as old hands abandon the ship of T.

Readers, the past two months, noted the pending absorption of People's United Financial Inc (PBCT) by M&T Bank Corp (MTB) which makes the purchase of PBCT stock at this time effectively an investment in MTB, which is why PBCTs share price continues to vibrate.

Another pending merger on which Advanced Micro Devices (AMD) buys Xilinx (XLNX) was noted by readers this month. Perhaps AMD will, at last, pay a dividend.

More than one writer decry my favoritism for low priced stocks. They especially dislike my "ideal" stocks whose dividend returns from a $1k investment equal or exceed share price. A prime example is Sirius XM Holdings Inc (SIRI), the satellite radio and pandora music catalog owner, priced now at $6.09 still passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 0.96%! A $1k investment buys about 164 shares. and they'll throw the owner a dividend of $9.60 which is half again as much as the share price. Assuming all things remain equal, SIRI dividends alone will pay back its purchase price in 104.38 years!

In July one reader expressed confusion about top-ten by yield summaries concluding each article. How can one top ten group show positive returns, and another be negative? The answer is that every collection of stocks has a different dynamic. Even the "safer" survivors of the dogcatcher safety check usually favor more expensive stocks. Furthermore a monthly shift in prices and yields can change the amount and direction of analyst-estimated projections.

Early this year I learned YCharts uses the following formula to chart forward looking dividend yields:

Yield = (last dividend paid x dividend frequency) / price]

Unfortunately that presumes the last dividend paid was a regularly occurring dividend. Companies paying variable dividends end up with outlandish spikes and holes by that formula. Accurate data is critical to this audience of dividend hunters I write for using YCharts data. I have suggested YCharts use a spot check against other data sources as a quality control measure. That is what I must do to verify their numbers.

My ongoing gaff confusing volatility with risk in my beta reports was detected in May 2019 and persisted until May 2020. Beta on my charts isnow described as risk/volatility. [For those looking for a volatility index on these charts, beta will have to suffice.]

Finally, I am working to untangle the run-on descriptions that introduce my metrics. Such as, "Probable profit-generating trades were identified. I used estimated dividend returns from $1k invested in each of the highest yielding stocks, etc, etc..."

Foreword

Note that this month readers mentioned thirty-two stocks that realize the ideal of offering annual dividends from a $1K investment exceeding their single share prices. These are listed below by yield:

The ReFaRo September Ideal Dividend Dogs

source: YCharts

Below are 42 tangible results for the reader favorite & rogue equities from September 23-October 27, 2021. YCharts data for this article was collected as of 10/27/21.

Actionable Conclusions (1-10): Brokers Predicted 15.95% To 67.52% Net Gains By 10 ReFa/Ro Stocks To November 2022

Six reader-favorite top-yield stocks 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 forecast for the reader-fave stocks, as graded by Wall St. wizards, was deemed 60% accurate.

Estimated dividend returns from $1k invested in each of the highest yielding stocks, plus the median one-year analyst target prices, as reported by YCharts, created the 2021-22 data points which identified probable profit-generating trades. (Note: one-year target prices by lone analysts were not counted.) Thus, ten probable profit-generating trades projected to October 27, 2022 were:

source: YCharts

QIWI plc (QIWI) was projected to net $675.24, based on the median of target price estimates from five analysts, plus a projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% under the market as a whole.

Banco Santander (BSBR) was projected to net $547.72, based on the median of target estimates from six analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risks 2% greater than the market as a whole.

British American Tobacco PLC (BTI) was projected to net $473.78, based on the median of target price estimates from two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% under the market as a whole.

Orchid Island Capital Inc (ORC) was projected to net $359.72, based on the median of target price estimates from two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 36% over the market as a whole.

Cherry Hill Mortgagee Investment Inc (CHMI) was projected to net $345.98, based on the median of target price estimates from two analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 21% greater than the market as a whole.

Icahn Enterprises LP (IEP) was projected to net $339.99 based on the median of target price estimates from two analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% less than the market as a whole.

AT&T Inc (T) netted $289.40 based on the median of target price estimates from twenty-eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 24% under the market as a whole.

Senstar Technologies Ltd (SNT) was projected to net $264.60 based on dividends alone, less broker fees. The Beta number showed this estimate subject to risk/volatility 4% greater than the market as a whole. Senstar is the new name for Magnus Security Systems Ltd which paid just its second annual dividend in September after taking seventeen years off.

AbbVie Inc (ABBV) netted $183.57 based on the median of target price estimates from twenty-one analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% under the market as a whole.

Verizon Communications Inc (VZ) was projected to net $169.18, based on the median of target price estimates from twenty-three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% greater than the market as a whole.

Average net gain in dividend and price was estimated at 36.49% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility equal to the market as a whole.

Source: Open source dog art from dividenddogcatcher.com

The Dividend Dogs Rule

The "dog" moniker was earned by stocks exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. So, the highest yielding stocks in any collection have become affectionately known as "dogs." More precisely, these are, in fact, best called, "underdogs."

42 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 10/27/21 for 42 equities and funds revealed the actionable conclusions discussed below.

See any Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analysts' price upside estimates expanded the stock universe to include popular growth equities, as desired.

23 ReFa/Ro By Target Gains

Source: YCharts

Actionable Conclusions (11-20): ReFa/Ro Top Yield Equity, Senstar Technologies, Led 40 By Yield into November

source: YCharts

ReFa/Ro sorted by yield included 11 of 11 Morningstar sectors plus 6 closed end investment companies [CEICs] among the 42 selections. This month there were no exchange traded funds [ETFs] and no exchange-traded notes [ETNs], among the ReFa/Ro.

The ten top reader-mentions by yield, were led by the first of two industrials firms, Senstar Technologies Ltd [1]. The other industrials representative placed third, Icahn enterprises LP [3]. Two real estate sector representatives placed second and sixth, Orchid Island Capital Inc (ORC) [2], Cherry Hills Mortgage Investment Corp [6],

In fourth place by yield was the lone technology rep in the top ten, QIWI PLC [4]. Then, one energy sector stock placed fifth, USA Compression Partners LP (USAC) [5].

An exchange traded fund [ETF] occupied seventh place on the list, Global X NASDAQ 100 Covered Call ETF (QYLD) [7].

Then, two financial services representatives placed seventh and eighth, FS KKR Capital Corp (FSK) [7], and Banco Santander (Brasil) [8]. In ninth place was the basic materials representative, BHP Group Ltd (BHP) [9],

Finally, one closed end investment company [CEIC] placed tenth, Oxford Lane Capital Corp (OXLC) [10] completed the top 10 ReFa/Ro by yield as of October 27 2021.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 13.07% To 95.92% Increases To November, 2022.

source: YCharts

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

Analyst Targets Predicted A 27.84% Advantage For 5 Highest-Yield, Lowest-Priced Reader Favored/Rogue Stocks To November, 2022

10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

source: YCharts

As noted above, top 10 ReFa/Ro selected 10/27/21 showing the highest dividend yields represented: industrials (2); real estate (2); financial services (2); technology (1); energy (1)); basic materials (1); closed end investment companies (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 38.92% Vs. (32) 30.44% Net Gains by All 10 To November 2022

source: YCharts

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 ReFa/Ro kennel by yield were predicted by analyst one-year targets to deliver 27.84% more net gain than $5k invested in all 10. The fifth lowest priced ReFa/Ro top-yield equity, QIWI PLC, was projected to deliver the best net gain of 67.52%.

source: YCharts

The five lowest-priced ReFa/Ro top yield dogs for October 27 were: Senstar Technologies Ltd; Orchid Island Capital; Banco Santander (Brasil) SA; Oxford Lane Capital Corp; QIWI PLC; with prices ranging from $3.93 to $8.96 per share.

Five higher-priced ReFa/Ro for August 30 were: Cherry Hill Mortgage Inc; USA Compression Partners LP, FS KKR Capital Corp; BHP Group Ltd; Icahn Enterprises LP, whose prices ranged from $9.13 to $57.78.

The distinction between five low-priced dividend dogs and the general field of 10 reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analysts' 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 42 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 42 November ReFa/Ro

(listed alphabetically by ticker symbol and including recommending reader nicknames.)

Note that this month readers mentioned thirty-two Dogcatcher Ideal stocks that offer annual dividends from a $1K investment exceeding their single share prices. They are ideal for further due diligence.

Dogcatcher Ideal Dogs

source: YCharts

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 FoFave/Ro 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. Open source dog art from dividenddogcatcher.com

cynoclub/iStock via Getty Images

Analyst’s 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.