November Readers Noted 26 Best To Buy Dividend Dogs

Summary

• October 24-December 3, 2021 readers mentioned 52 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, SNY, ENB, OFI, MO, DOW, PTMN, IBM, KMI, & NNN averaged 33.62% net gains from data collected 12/3/21.
• Ten analyst-target-augured TOP-PRICE-UPSIDE reader faves & rogues (ReFa/Ro) were: QIWI, SNY, T, ENB, SFL, DOW, IBM, MO, OPI, and KMI boasting a 29.06% average target price upside estimate.
• By YIELD, the following ReFa/Ro made the top ten: USOI; QIWI; NEWT; MVO; BHP; NLY; QIWI; PTMN; OPI; DX; OFS. They averaged 15.39% annual yield. (Two made all-three lists: OPI, and QIWI).
• $5k invested in the lowest-priced five of these top-yield ReFa/Ro dividend dogs showed 18.25% more net gain than from $5k invested in all ten. The little (lower-priced) ReFa/Ro dogs extended their lead on this pack into December.
• Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

cynoclub/iStock via Getty Images

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's 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 flagrantly fouled stock lists not synchronized with the data charted. Last 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.

Last month, readers noted my gaff alleging AT&T's impending dividend cut might happen in 2021. It's timed to coincide with the spin-off of AT&T's (T) Warner assets in mid-2022. 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 several months, noted the pending absorption of People's United Financial (PBCT) by M&T Bank (MTB) which makes the purchase of PBCT stock, at this time, effectively an investment in MTB, which is likely why PBCT's share price continues to mostly sink.

Another pending merger, in which Advanced Micro Devices (AMD) buys Xilinx (XLNX), was again noted by readers this month. Perhaps AMD will, at last, pay a dividend. Most likely, however, the tech sector will just lose another dividend dog.

More than one writer decried 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 (SIRI), the satellite radio and pandora music catalog owner, priced now at $6.33 still passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 1.39%. A $1k investment buys about 158 shares and they'll throw the owner a dividend of $13.90 which is more than double the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 71.9 years (and that assumes the satellite radio and subscription music service can survive that long).

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 formula 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 is now 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..." The quest for clarity and candor continues...

Foreword

Note that this month readers mentioned twenty-six 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 November Ideal Dividend Dogs

Source: YCharts

Below are 52 tangible results from reader favorite & rogue equities from October 27- December 3, 2021. YCharts data for this article was collected as of 12/3/21.

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

Three 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 30% 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 December 3, 2022, were:

Source: YCharts

QIWI plc (QIWI) was projected to net $757.95, 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 29% under the market as a whole.

Sanofi SA (SNY) was projected to net $397.05, 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 40% less than the market as a whole.

Enbridge (ENB) was projected to net $355.70, 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 11% under the market as a whole.

Office Properties Income Trust (OPI) was projected to net $282.96, based on the median of target price estimates from four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 24% over the market as a whole.

Altria Group (MO) was projected to net $274.19, based on the median of target price estimates from sixteen analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 36% less than the market as a whole.

Dow Inc. (DOW) was projected to net $271.37 based on the median of target price estimates from twenty-two analysts, plus the projected annual dividend, less broker fees. A Beta number is not yet available for DOW.

Portman Ridge Finance (PTMN) netted $269.68 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 17% over the market as a whole.

International Business Machines (IBM) was projected to net $268.69 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 11% greater than the market as a whole.

Kinder Morgan (KMI) netted $258.79 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 3% over the market as a whole.

National Retail Properties (NNN) was projected to net $225.36, based on the median of target price estimates from twelve analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 13% under the market as a whole.

Average net gain in dividend and price was estimated at 33.62% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 17% under 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."

52 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 12/3/21 for 52 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.

43 ReFa/Ro By Target Gains

Source: YCharts

Actionable Conclusions (11-20): ReFa/Ro Top Yield ETN, Credit Suisse Crude Oil Shares, Led 52 By Yield into December

Source: YCharts

ReFa/Ro sorted by yield included 10 of 11 Morningstar sectors plus 2 closed-end investment companies [CEICs], 3 exchange-traded funds [ETFs], and one exchange-traded note [ETN], among the 52 ReFa/Ro selections.

The ten top reader-mentions by yield were led by the lone ETN offering, Credit Suisse Crude Oil Shares Covered Call ETN (USOI) [1]. In second place by yield was the lone technology rep in the top ten, QIWI [2].

Then, three financial services representatives placed third, seventh, and tenth - Newtek Business Services Corp (NEWT) [3], Portman Ridge Finance [7], and OFS Capital (OFS) [10].

Then, one energy sector stock placed fourth, MV Oil Trust (MVO) [4], which was followed by the lone top ten basic materials representative in fifth, BHP Group (BHP) [5].

Finally, three real estate sector representatives placed sixth, eighth, and ninth, Annaly Capital Management (NLY) [6], Office Properties Income Trust [8], and Dynex Capital Inc (DX)[9], which completed the top 10 November ReFa/Ro by yield as of December 3, 2021.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 19.95% To 61.66% 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 An 18.25% 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 12/3/21 showing the highest dividend yields represented exchange-traded notes (1), technology (1), financial services (3), energy (1), basic materials (1), and real estate (3).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 28.93% Vs. (32) 24.47% 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 18.25% more net gain than $5k invested in all 10. The second lowest priced ReFa/Ro top-yield equity, QIWI, was projected to deliver the best net gain of 75.79%.

Source: YCharts

The five lowest-priced ReFa/Ro top yield dogs for December 3 were: Crude Oil Shares Covered Call ETN, QIWI, MV Oil Trust, Annaly Capital Management, and OFS Capital, with prices ranging from $4.70 to $8.17 per share.

Five higher-priced ReFa/Ro for December 3 were: Dynex Capital, Office Properties Income Trust, Portman Ridge Finance, Newtek Business Services, and BHP Group, whose prices ranged from $16.75 to $54.51.

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 52 August ReFa/Ro

(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)

Source: Seeking Alpha

Note that this month readers mentioned twenty-six Dogcatcher Ideal stocks that offer annual dividends from a $1k investment exceeding their single share prices.

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.

Disclosure: I/we have a beneficial long position in the shares of INTC, 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.