28 Prime-Buy August Reader Dividend Dogs

Sep. 06, 2022 8:01 PM ETDLY, DSL, ETJ, FSK, MITT, MPW, OXLC, PACW, PNNT, RC, RVT, SBLK, SIRI, SWK, T, TRN, VALE3 Comments

Summary

  • July 29 - August 31, 2022 readers mentioned 38 equities in their comments. Some lamented bad-news, so bad-news investments (rogues) mixed with (mostly) favorites. (Thus, these are ReFa/Ro.).
  • Ten analyst-target-estimated TOP-NET-GAIN reader fave/rogues, T, PNNT, MPW, SWK, RC, TRN, PACW, VALE, SBLK, & MITT averaged 64.86% net gains from data collected 9/2/22.
  • Ten analyst-target-augured TOP-PRICE-UPSIDE reader faves & rogues (ReFa/Ro) were: MPW, MSFT, SWK, TRN, PACW, DDOG, VALE, CBIO, SBLK, and MITT boasting a 60.49% average target price upside estimate.
  • By YIELD, the following ReFa/Ro made the top ten: DLY; ETJ; DSL; FSK; VALE; RVT; RC; MITT; OXLC; SBLK. They averaged 13.99% annual yield. (Three stocks made all three lists this month: MITT; SBLK; VALE).
  • $5k invested in the lowest-priced five of these top-yield ReFa/Ro dividend dogs showed 31.96% more net-gain than from $5k invested in all ten. The little (lower-priced) ReFa/Ro dogs recovered their lead for this pack through August.
  • 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. In January a reader discovered a "Safer" net gain chart posing as a Monthly Pay chart that even Seeking Alpha Editors missed. In February the pending demise of my four S&P 500 Aristocrat buy suggestions caught reader attention. Every month some discover errant ticker symbols. Earlier this year, a reader asked how to identify Rogues in the ReFa/Ro list. Last month high yields were criticized that they are sure signs of Rogueishness. Not true, they are sure signs of high yield, how long TBD.

Reader suggestions of buy and hold dividend stocks are most welcome and sure to be reported on my ReFaRo posts. That’s my ultimate goal, of course, to find ten or twenty sure-fire long-term dividend payers purchased when their single share prices are lower than the dividend paid from $1K invested. Suggestions, please! We’re trying to predict the future here, Kings and Aristocrats might hold up but they may be too long in the tooth to last.

In February one reader suggested an option strategy for monthly-paying dividend stocks:

"You should identify where options are available on the Monthly dividend stocks. What I do is find mopay stocks with options, I buy and write covered calls about 6 - 12 months out. I look for a scenario where I collect the dividend and get my stock bought back at a much lower price than I pay, but pocket a premium that makes up the loss. This gives me a dividend boost, since my cost is lower. It's like a guaranteed CD with little risk."

Another reader suggested I dial-back my blatant opinion that high-yield equates to high-risk:

"The article says "high dividends are a sure sign of high risk."

It should be "high dividends might be a sign of high risk."

"If a good stock/ETF/CEF with a 5% dividend drops simply because the whole market dropped, the dividend could get to 8 or 9%. I think that's a great time to buy because the high dividend and low price makes it a low risk investment."

Last October readers noted my gaffe alleging AT&T's impending dividend cut might happen in 2021. It was timed to coincide with the spin-off of AT&T's Warner assets and finally happened in 2022.

More than one writer has decried my favoritism for low-priced stocks. They especially dislike my "ideal" stocks whose dividend returns from a $1k investment equaling or exceeding share price. A prime example is Sirius XM Holdings Inc (SIRI), the satellite radio and pandora music catalog owner, priced now at $6.07 easily passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 1.45%! A little over $1k investment now buys 165 shares. and they'll throw the owner a more than double the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 69 years (and that assumes the satellite radio and subscription music service can survive that long)!

Last month a reader said a $13.20 dividend on a $1K investment was too small. I point out that holders of AAPL stock garner about $6.20 in dividends from $1K invested.

Every month readers grumble that they can’t find my six previous Dog of the week portfolios in my Dividend Dogcatcher service on the SA Marketplace site. This year SA has listed all the postings on my Dogcatcher service by date. So to find the summary and reference guide to each portfolio look at:

August 22, 2015 for I

October 13, 2016 for II

September 12, 2017 for III

September 13, 2018 for IV (Ivy)

September 8, 2019 for V (Volio)

September 12, 2020 for VI (Vista)

October 10, 2021 for VII (Viital).

Incidentally, the VIII portfolio of Dividend Dogs for each week (Viking) will launch, on or about. November 10 2022.

Foreword

Note that this month readers mentioned twenty-eight stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:

The ReFaRo August Ideal Dividend Dogs

ReFaRo (1A) Ideal Dogs 9/2/22

source: YCharts

Above are the 28 ideal candidates derived from the 38 tangible results from reader favorite & rogue equities from July 29 - August 31, 2022. YCharts data for this article was collected as of 9/2/22.

Actionable Conclusions (1-10): Brokers Imagined 32.86% To 226.64% Net Gains From 10 ReFa/Ro Stocks To August 2023

Four 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 reader-fave stocks, as graded by Wall St. wizards, was deemed 40% 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 2022-23 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 September 2, 2023 were:

ReFaRo (1B) Gainers To 9/2/23

source: YCharts

AG Mortgage Investment Trust Inc (MITT) was projected to net $2,266.44, based on the median of target price estimates from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 58% over the market as a whole. It's a rogue with a dividend likely to be reduced.

Star Bulk Carriers Corp (SBLK) netted $867.82 based on the median of target price estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% over the market as a whole. SBLK is Rogue.

Vale SA (VALE) netted $626.13 based on the median of target price estimates from 23 analysts, plus dividends, less broker fees. he Beta number showed this estimate subject to risk/volatility 7% under the market as a whole. It’s a rogue.

PacWest Bancorp (PACW) was projected to net $454.03, based on the median of target estimates from 9 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% over the market as a whole. PACW is a Rogue prone to cutting dividends.

Trinity Industries Inc (TRN) was projected to net $422.72, based on the median of target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 77% under the market as a whole. This is a Fave.

Ready Capital (RC) was projected to net $413.28 based on the median of target price estimates from 7 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% less than the market as a whole. A Rogue.

Stanley Black & Decker Inc (SWK) was projected to net $404.24, based on the median of target price estimates from 14 analysts, plus a projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% over the market as a whole. It's a fave.

Medical Properties Trust Inc (MPW) was projected to net $369.88, based on the median of target price estimates from 13 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% under the market as a whole. MPW is a fave.

Pennant Park Investment Corp (PNNT) was projected to net $332.52, based on the median of target price estimates from 8 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 58% over the market as a whole. A rogue.

AT&T Inc (T) was projected to net $328.60 based on the median of target price estimates from 23 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 49% under the market as a whole. A fave of mine but a rogue to many readers.

Average net gain in dividend and price was estimated at 64.86% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 16% over the market as a whole. August, 2022, top-ten gainers count five rogues, four faves, and a toss-up.

ReFaRo (2) Dog 9/2/22 Open source dog art DDC7 from dividenddogcatcher.com

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."

38 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 9/2/22 for 38 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.

27 ReFa/Ro By Target Gains

ReFaRo (3A) 27 Target Gains 9/2/22-23

Source: YCharts

Actionable Conclusions (11-20): ReFa/Ro Top (Rogue) Stock, MITT, Led 36 By Yield Through August

ReFaRo (3B) 36 by Yield 9/2/22-23

source: YCharts

The 38 ReFa/Ro sorted by yield included ten of 11 Morningstar sectors plus 8 closed end investment companies [CEICs], and one exchange traded fund [ETF] but no exchange traded notes [ETNs], among the selections.

The ten top reader-mentions by yield, were led by lone industrials representative, Star Bulk Carriers Corp [1].

Then five closed end investment companies [CEICs] ganged up in the middle and at the end; placing second, fifth, and eighth through tenth. They were: Oxford Lane Capital Corp (OXLC) [2]; Royce Value Trust (RVT) [5]; DoubleLine Income Solutions (DSL) [8]; EV Risk-Managed Diversified Equity Inc (ETJ) [9]; DoubleLine Yield Opportunities Fund (DLY) [10].

Two real estate representatives placed third and fourth, AG Mortgage Investment Trust Inc, and one basic materials entity placed sixth, Vale SA [6], Finally, the lone financial services member placed seventh, FS KKR Capital Corp (FSK) [7], which completed the top 10 ReFa/Ro by yield as of August 31, 2022.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 27.12% To 213.98% Increases To August, 2023.

ReFaRo (4) Upsides 9/2/22-23

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 Indicated A 31.96% Advantage For 5 Highest-Yield, Lowest-Priced Reader Favored/Rogue Stocks To August, 2023

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

ReFaRo (5) 10List 9/2/22-23

source: YCharts

As noted above, top 10 ReFa/Ro selected 9/2/22, showing the highest dividend yields, represented: industrials (1); CEICs (5); real estate (2); basic materials (1); financial services (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 64.28% Vs. (32) 48.71% Net Gains by All 10 To August 2023

ReFaRo (6) 10Gains 9/2/22-23

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 31.96% more net gain than $5k invested in all 10. The second lowest-priced ReFa/Ro top-yield equity, AG Mortgage Investment Trust Inc, was projected to deliver the best net gain of 226.64%.

ReFaRo (7) 10 By Price 9/2/22-23

source: YCharts

The five lowest-priced ReFa/Ro top-yield dogs for September 2 were: Oxford Lane Capital Corp; AG Mortgage Investment Trust Inc; EV Risk-Managed Diversified Equity Inc; DoubleLine Income Solutions; Vale SA, with prices ranging from $5.87 to $12.17 per share.

Five higher-priced ReFa/Ro as of September 2 were: Ready Capital Corp; DoubleLine Yield Opportunities; Royce Value Trust; Star bulk Carriers Corp; FS KKR Capital Corp, whose prices ranged from $12.57 to 21.31.

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 90% accurate on the direction of change and just 0% to 15% accurate on the degree of change.

The 38 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 38 August ReFa/Ro

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

ReFaRo (8) 38 By Ticker & Members 9/2/21-23

source: YCharts

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

28 Dogcatcher Ideal Dogs for August

ReFaRo (1A) 28 Ideal Dogs 9/2/22

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

Clever pomeranian dog with a book. A dog sheltered in a blanket with a book.

Kshavratskaya

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This article was written by

Fredrik Arnold profile picture
28.5K Followers
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 a beneficial long position in the shares of T, GE, TJX 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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