AAII Dog Diligence Fetches 15 HiYield And HiRising July Dividend Buys

Jul. 26, 2022 11:50 PM ETABR, AEM, ALCO, ALLY, BBY, BGFV, EOG, ESCA, FNF, HOFT, LEG, MED, MPLX, OTEX, PAAS, PFH, PM, PNW, PRS, PRU, SIRI, UVV, VICI, WU

Summary

  • The June 2022 AAII Journal listed two sets of stocks sorted as: High-Yielding Dividend Payers and Biggest Rising Dividend Payers. Those two articles revealed 40 dividend-paying-equities.
  • The American Association of Individual Investors (AAII) is an independent non-profit corporation assisting individual investors through programs of education, information, and research.
  • Those 40 AAII HiYield/HiRise-dividend-stocks ranged 1.10% to 9.97% in annual yield and ranged -4.31% to 112.12% in one-year price-target-upsides per brokers 7/22/22.
  • Top-ten AAII 2021-22 Kiplinger Dividend stocks boasted net gains from 20.9% to 92.52% as of July 22 per YCharts data.
  • $5k invested in the lowest-priced five of ten top-yield AAII HiY/HiRise-dividend-stocks in June showed 22.45% more net gain than from $5k invested in all ten. Little (lower-priced) stocks maintained a near two and one-quarter length lead on this 40 dog pack in July.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

Abstract modern collage. The man with the head of Dog male accountant or company manager works in an office in view of the accumulated paper work.

unomat/iStock via Getty Images

Foreword

This article is based on two AAII Journal articles, aimed at finding (1) stocks of companies that are financially healthy enough to sustain and even grow their dividend, and (2) stocks of highest-quality companies with proven ability to grow their dividends over time, demonstrating an ability to survive through a range of market environments.

High-Yielding Dividend Payers

by Derek J. Hageman

There are two main dividend investing strategies: high yield and high dividend growth. In general, we can say that the high-yield strategy (as the name implies) seeks high-yielding stocks. Due to the higher-than-average yield, the market often perceives these stocks as riskier compared to high dividend growth stocks.

This article shows 15 high-yielding companies. The article’s universe was limited to exchange-listed stocks with a share price above $3. Foreign stocks were excluded because of the uniqueness of their financial statements.

A filter requiring annual dividend increases over the last three years was specified. The three-year historical dividend growth rates provide a sense of dividend sustainability. Positive current earnings for the current fiscal year were also required as a minor financial strength screen.

Up, Up and Away: Biggest Rising Dividend Payers

by Derek J. Hageman

Dividend-paying stocks can satisfy investors’ need for current income and capital growth, especially during volatile markets. Many investors turn to the greater stability of rising dividend-paying stocks. While much remains uncertain, the highest-quality companies have proven their ability to grow their dividends over time, demonstrating an ability to survive through a range of market environments.

This article shows 25 rising dividend payers with the highest 12-month dividend growth rates. The article’s universe was limited to exchange-listed stocks with a share price above $3. A preliminary table was dominated by banks, so financials were excluded (with the exception of insurance companies) to provide a more diverse list of passing companies from different industries. Foreign stocks were excluded because of the uniqueness of their financial statements.

A filter requiring annual dividend increases over the last five years was specified. The five-year historical dividend growth rates provide a sense of dividend sustainability. Positive earnings for the current fiscal year were also specified as a minor financial strength screen.

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this collection of AAII HiYield/HighRising Stocks is perfect for the dogcatcher process. Below are the July 22, 2022 data for 40 dividend stocks parsed by YCharts.

The prices of 15 of these 40 AAII HiYield/HighRising Stocks (listed by yield) made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 15 Dogcatcher ideal AAII HiYield/HighRising Stocks for June are: Arbor Realty Trust, Inc. (ABR); MPLX LP (MPLX); Big 5 Sporting Goods Corp (BGFV); Alico, Inc. (ALCO); Universal Corp (UVV); The Western Union Co (WU); Hooker Furnishings Corp (HOFT); Fidelity National Financial, Inc. (FNF); Escalade, Inc (ESCA); Leggett & Platt, Inc (LEG); VICI Properties Inc. (VICI); Ally Financial Inc. (ALLY); Yamana Gold Inc. (AUY) (YRI.TO); Pan American Silver Corp. (PAAS); and Sirius XM Holdings Inc. (SIRI).

All fifteen live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as "look closer to maybe buy" opportunity.

Actionable Conclusions (1-10): Analysts Estimated 20.9% To 92.52% Net Gains For Top Ten AAII HiYield/HighRising Stocks To July 2023

One of ten top AAII HiYield/HighRising dividend stocks by yield was also among the top ten gainers for the coming year based on analyst 1-year target prices. (It is tinted gray in the chart below). Thus, the yield-based forecast for these June dogs, as graded by Wall St. Wizards, was 10% accurate.

AAHYHR (1A) GAINERS JULY 22-23

YCharts

Estimated dividends from $1000 invested in each of the highest-yielding AAII HiYield/HighRising Stocks, added to the median of aggregate one-year target prices from analysts (as reported by YCharts), generated the following results. Note: one-year target prices by lone analysts were not included. Ten probable profit-generating trades projected to July 2023 were:

Medifast, Inc. (MED) was projected to net $925.24, based on the median of target estimates from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% greater than the market as a whole.

Agnico Eagle Mines Ltd (AEM) was projected to net $700.50, based on dividends, plus the median of target price estimates from ten analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% less than the market as a whole.

Fidelity National Financial, Inc. was projected to net $551.41, 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 42% greater than the market as a whole.

Yamana Gold Inc. was projected to net $546.40, based on the median of estimates from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% greater than the market as a whole.

EOG Resources, Inc. (EOG) was projected to net $476.14, based on dividends, plus the median of target price estimates from thirty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 70% over the market as a whole.

Ally Financial Inc. was projected to net $417.68, based on dividends, plus the median of target price estimates from twenty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 41% over the market as a whole.

Pan American Silver Corp. was projected to net $392.53 based on the median of target price estimates from seven analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% more than the market as a whole.

Open Text Corp (OTEX) was projected to net $331.48, based on the median of target price estimates from nine analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% less than the market as a whole.

Arbor Realty Trust, Inc. was projected to net $310.17, based on dividends, plus median target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 76% more than the market as a whole.

Best Buy Co., Inc. (BBY) was projected to net $208.98, based on dividends, plus the median of target price estimates from twenty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% over the market as a whole.

The average net gain in dividend and price was estimated at 48.61% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 33% over the market as a whole.

AAHYHR (2) July 22-23Open source dog art DDC11 from dividenddogcatcher.com

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".

40 AAII HiYield/HighRising Stocks Per July Analyst Targets

AAHYHR (3A) 1-40BYTARGETS JULY,22-23

YCharts

40 AAII HiYield/HighRising Stocks Per July Yield Data

AAHYHR (3B) 1-40BYYIELD JULY, 22-23

YCharts

Actionable Conclusions (11-20): Ten Top AAII HiYield/HighRising Stocks By Yield

Top ten July AAII HiYield/HighRising Stocks by yield represented six of eleven Morningstar sectors. First place went to the one real estate, equity, Arbor Realty Trust [1].

Second place was claimed by the lone energy sector representative, MPLX LP [2]. Then, two consumer cyclical representatives took the third and tenth slots, Big Five Sporting Goods Inc [3], and Hooker Furnishings [10].

The fourth, fifth, and seventh places were claimed by consumer defensive representatives, Alico, Inc. [4], Universal Corp [5], and Philip Morris International (PM) [7]. Two financial services representatives placed sixth and eighth, The Western Union Co [6] and Prudential Financial, Inc. (PRU) [8].

Finally, a utilities representative found itself in the ninth position on this list, Pinnacle West Capital Corp (PNW) [9], to complete the top ten AAII HiYield/HighRising pack for July.

Actionable Conclusions: (21-30) Ten Top AAII HiYield/HighRising Stocks Showed 17.32%-89.72% Upsides While (31) One Downsider Fell 4.4% For July 2023

AAHYHR (4) UP/DNSIDES JULY 22-23

YCharts

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

Analysts Forecast A 22.45% Advantage For 5 Highest Yield, Lowest Priced, of 10 AAII HiYield/HighRising Stocks To July 22, 2023

Ten-top AAII HiYield/HighRising Stocks were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.

AAHYHR (5)10LIST JULY 22-23

YCharts

As noted above, top-ten AAII HiYield/HighRising Stocks screened 7/22/22, showing the highest dividend yields, represented six of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top-Ten AAII HiYield/HighRising Stocks (32) Delivering 13.38% Vs. (33) 10.93% Net Gains by All Ten Come July 2023

AAHYHR (6) 10GAINS JULY 22-23

YCharts

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten AAII HiYield/HighRising Dividend kennel by yield were predicted by analyst 1-year targets to deliver 22.45% more gain than $5,000 invested as $.5k in all ten. The second lowest-priced selection, Arbor Realty Trust, Inc., was projected to deliver the best net gain of 31.02%.

AAHYHR (7)10BYPRICE JULY, 22-23

YCharts

The five lowest-priced top-yield AAII HiYield/HighRising Dividend Dogs as of July 22 were: Big Five Sporting Goods Corp; Arbor Realty Trust Inc; Hooker Furnishings Corp; The Western Union Co; MPLX LP, with prices ranging from $12.89 to $30.26.

Five higher-priced Kiplinger exceptional dividend dogs as of July 22 were: Alico Inc; Universal Corp; Pinnacle West Capital Corp; Prudential Financial Inc; Philip Morris International, whose prices ranged from $34.30 to $95.93.

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 15% 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

This article features 40 AAII HiYield/HighRising stocks. The article focuses whole collection so the original distinction between the high-yield and the high-rise collection is neglected. Therefore, below are the original lists of 15 and 25 stocks grouped by topic.

AAHYHR (8) 15/25 BYTOPIC JULY, 22-23

AAII, YCharts

If somehow you missed the suggestion of which stocks are ripe for picking at the start of this article, here is a reprise of the list at the end:

The prices of 15 of these 40 AAII HiYield/HighRising Stocks (listed by yield) made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

15 Dogcatcher Ideal Stocks for June

AAHYHR (9) 15 DC IDEALS JULY, 22-23

AAII, YCharts

All fifteen live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as "look closer to maybe buy" opportunity.

How All Ten Top AAII HiYield/HighRising Stocks Could Become Ideal and Fair Priced Dogs

AAHYHR (10) CURRENT vs FAIR PR AAII JULY,22-23

YCharts

Since seven of the top ten AAII HiYield/HighRising shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those seven plus the three at recent prices (top chart) with the fair pricing of all ten top dogs conforming to that ideal (middle chart). The dollar and percentage difference between the recent and fair priced are shown in the bottom chart.

With renewed downside market pressure to 26.2%, it is possible for all ten highest-yield AAII HiYield/HighRising stocks, to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a big head start with seven of ten already fair priced.

Stocks listed above were suggested only as possible reference points for your 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 in Yahoo Finance. Dog image: Open source dog art from dividenddogcatcher.com.

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This article was written by

Fredrik Arnold profile picture
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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.

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.

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