All but seven equities and all of the funds listed in this September batch of monthly-paying dividend dogs live up to the ideal of paying annual dividends from a $1K investment exceeding their single share price. Here, in the MoPay collection, lie affordable (yet volatile and risky) bargains. One metric ($1k invested income>1 share price) fits all!
Two years and six months past the 2020 Ides of March market dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may be now.
To learn which of these 103 MoPay equities pay "safer" dividends, go to my dividend dogcatcher marketplace lists after September 28th.
Five of ten top-yield MoPay stocks (shaded in the chart below) were verified as being among the top-ten gainers for the coming year based on analyst one-year target prices. Thus, the Dogcatcher yield-based strategy for this MoPay group, as graded by broker estimates this month, proved 50% accurate.
Estimated dividend payouts from $1000 invested in each of the ten highest-yielding stocks, plus analysts median 1yr target prices for those stocks, as reported by YCharts, produced the data points for the gains estimates below. Note: target prices from lone analysts were not counted. Ten probable profit-generating trades so identified to September 2023 were:
Orchid Island Capital, Inc. (ORC) netted $598.98 based on the median of target estimates from 2 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 35% greater than the market as a whole.
Ellington Residential Mortgage REIT (EARN) netted $532.24 based on the median of annual price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 67% greater than the market as a whole.
Generation Income Properties, Inc. (GIPR) was forecast to net $419.33 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 65% greater than the market as a whole.
Slate Grocery REIT (OTC:SRRTF) netted $385.21 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% over the market as a whole.
EPR Properties (EPR) netted $372.49 based on the median of target price estimates from 8 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 61% greater than the market as a whole.
Gladstone Commercial Corp. (GOOD) netted $329.82 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 5% greater than the market as a whole.
SL Green Realty Corp. (SLG) netted $316.83 based on the median of target estimates from 18 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 47% over the market as a whole.
ARMOUR Residential REIT (ARR) netted $272.44 based on the median of target price estimates from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility equal to the market as a whole.
Ellington Financial Inc. (EFC) netted $253.80, based on the median of target price estimates from 8 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 78% greater than the market as a whole.
Broadmark Realty Capital (BRMK) netted $202.76 based on the median of target estimates from 3 analysts, plus estimated annual dividends less broker fees. A Beta number was not available for BMRK.
Average net gain in dividend and price was 36.84% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 45% greater than the market as a whole.
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 specifically, these are, in fact, best called "underdogs".
Three lists produce numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, August 11 closing prices and estimated annual dividends were referenced from Yahoo/Finance. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) the high yield (and higher risk) MoPay CEICs/ETFs/ETNs list.
Quarterly, Semi-Annual and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.
Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.
This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Numerous prominent MoPay firms declared dividend cuts between May and June, 2020, including: Oxford Square Capital Corp; Partners Real Estate Investment Trust; Orchid Island Capital Inc; Cross Timbers Royalty Trust; H&R Real Estate Investment Trust; BTB Real Estate Investment Trust; American Finance Trust Inc; Mesa Royalty Trust; Solar Senior Capital Ltd; Ellington Financial Inc; Dividend Select 15 Corp; Chesswood Group Ltd; Sabine Royalty Trust; TORC Oil & Gas Ltd; Freehold Royalties Ltd; ARC Resources Ltd; Inter Pipeline Ltd; San Juan Basin Royalty Trust; Ag Growth International Inc.
Former MoPay top ten regular by yield. Bluerock Residential (BRG) announced December 2019 it was retreating to quarterly dividend payments "in keeping with industry tradition." That tradition continued with Armour Residential REIT and Stellus Capital Investment Corp both transitioned to QPay in June, 2020. Within three months, however, both SCM and ARR returned to MoPay mode.
Capitala Finance Corp. (CPTA) cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017, then suspended it as of May 3, 2020. Oxford Square Capital (OXSQ), however, issued this nebulous statement regarding its pending monthly payments: "While no decision has yet been made with regard to the Company's common stock distributions for July, August and September, we believe that the Company's Board of Directors will likely elect to reduce or suspend the Company's distributions for those months." On June 2, 2020 the company declared $0.035 monthly distributions for July August and September, 2020 which have persisted for the past two and one-half years.
Top yield stock for July, 2018, June 2021, and September 2021, Orchid Island Capital, released this cautionary note with its monthly dividend announcements back in 2018: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back-up their words with actions cutting the dividend from $0.14 to $0.11 in February, to $0.09 in March, to $0.08 in September, 2018, and to $0.055 for May, 2020. However in August. 2020 ORC monthly dividend increased from $0.06 to $0.065 for September, October, and into 2021. ORC now pays a $0.16 monthly dividend and its price has risen above $5.00 per share, and is listed here.
The U.S. exchange MoPay segment is volatile, transitive, recovering, and adding members. More trades in monthly pay equities are available from Canadian firms, many of which are also listed on U.S. OTC exchanges. Active listed MoPays priced over $2 were up from 71 in October to 73 in February 2021, and since October 2021 at the full strength of over 100 active, not seen for years. This list was limited to 103 by raising the share price limit to $5 and not listing dividends yielding over 20% or under 2.05%.
Top ten of these US exchange listed monthly pay dividend equities showing the best yields for September, represented just three of the eleven Morningstar market sectors. Representative firms split 7, 1, and 2 between the real estate, energy, and financial services sectors.
First place went to the first of seven real estate representatives: ARMOUR Residential REIT Inc . The others placed 2nd to 6th, and 9th: Orchid Island Capital ; Broadmark Realty Capital Inc. ; AGNC Investment Corp. (AGNC) ; Ellington Financial Inc. ; Ellington Residential Mortgage REIT ; Dynex Capital Inc. (DX).
Seventh place was occupied by the lone energy representative, San Juan Basin Royalty Trust (SJT) .
Finally, two financial services sector members placed eighth and tenth, SLR Investment Corporation (SLRC) , and Horizon Technology Finance (HRZN) which completed the September MoPay top ten equities list by yield.
Results from YCharts, shown below, show 30 MoPay dividend stocks (as of market closing price September 18) compared with the median of analyst target prices one year-out. The ten top-stocks displayed 13.95% to 44.99% price upsides for the next year based on analyst one-year target price estimates.
Five (tinted) of ten on this top ten price upside list were also members of the top ten list by yield. The first five places on this upside list went to: Orchid Island Capital Inc , Generation Income Properties Inc. , Slate Grocery REIT , EPR Properties , and Broadmark Realty Capital Inc. .
The higher level five were, Gladstone Commercial Corp. , SL Green Corp. , Ellington Residential Mortgage REIT , Dynex Capital Inc. , and Ellington Financial Inc. .
Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.
Those ten MoPay stocks showing the highest upside price potential to September 2023 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
Eighty top monthly dividend paying Closed End Funds, Exchange Traded Funds and Notes listed below were culled from nearly 800 candidates. Yields of 12.95% or greater, calculated as of September 18, determined the top ten. All 80 show assets under management (AUM) greater than $10M and are priced above $5 per share.
The top-ten monthly-paying dividend investment companies, funds, & notes showing the biggest yields for per YChart & YahooFinance data featured two uncollateralized debt instruments [ETNs], six closed-ended investment company [CEICs], and two open-ended investment companies [ETFs].
The two uncollateralized debt instrument companies (ETNs) placed first, and third: ETRACS Monthly Pay 2x Leveraged US Small Cap High Dividend ETN (SMHB) , and ETRACS Monthly Pay 1.5X Leveraged Closed-End Fund Index ETN (CEFD) .
Five closed end investment companies [CEICs] placed second, fourth, sixth, seventh, ninth, and tenth. They were: Eagle Point Credit Co. (ECC) ; Oxford Lane Capital Corp. (OXLC) ; RiverNorth Opportunities (RIV) ; PIMCO Dynamic Income (PDI) ; Saba Capital Income & Opportunities Fund (BRW) ; Source Capital (SOR) .
Finally, two open ended investment company [ETFs] placed fifth, and eighth Global X SuperDividend ETF (SDIV) , and Global X NASDAQ 100 Covered Call ETF (QYLD) to complete the top-ten Exchange Traded Notes, Exchange Traded Funds, and Closed End Investment Companies list for September, 2022-23.
Note that the September 2022 top ten equity dividends are currently priced 1% under those of the top ten funds. Last September they were 2% higher. Last June they were 1% higher. The price differences were found in the outlandishly high dividends attributed to the top equities or funds. Without those aberrations, funds are generally priced higher than the equities due to the overhead costs of fund management.
In June 2012 readers suggested the author include these funds, trusts, and partnerships in the MoPay article. A list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. That list was supplemented by an upside potential article in October and a upside vs. buy & hold in November. Another list factored December 2012 reader comments.
Now we have a new decade of 2020 that began last January, and continued in February, March, April, early May, and mid May, June, July, August, September, October, November, December. The progression continued in 2021 in January, February, March, April, May, June, July, August, September, October, November, and December. And carried-on in 2022, January, February, March, April, May, June/July, August, and now September we compare and contrast MoPay equity upside potential to the yield (and higher risk/volatility) should one be tempted to buy and hold Closed End Investments or Exchange Traded Funds and Notes.
Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and YahooFinance, produced the following charts.
$5000 invested as $1k in each of the five Lowest priced stocks in the top ten MoPay dividend dog kennel by yield were predicted by analyst 1 year targets to deliver 26.1% more net gain than $5,000 invested as $.5k in all ten. The second lowest-priced MoPay dividend dog, Generation Income Properties Inc., was predicted to deliver the best net gain of 58.47%.
Lowest priced five MoPay dividend stocks estimated as of September 18 were: Broadmark Realty Capital Inc.; ARMOUR Residential REIT Inc.; Ellington Residential Mortgage REIT; AGNC Investment Corp.; San Juan Basin Royalty Trust, with prices ranging from $6.39 to $11.32.
Higher priced five MoPay dividend equities, estimated as of September 18, were: Horizon Technology Finance Corp.; Orchid Island capital Inc.; Ellington Financial Inc.; Dynex Capital Inc.; SLR Investment Corp., whose prices ranged from $11.59 to $15.04.
This distinction between five low-priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, is today useful to find rewarding dogs in the MoPay kennel.
The added scale of projected gains, based on analyst targets, contributed 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. It is also the work analysts got paid big bucks to do.
Caution is advised, however, as analysts are historically 20% to 90% accurate on the direction of change and about 0% to 15% accurate on the degree of the change.
Gains/declines as reported do not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
If somehow you missed the suggestion of the stocks ripe for picking at the start of this article, here is a reprise of the list at the end:
(Alphabetical by Ticker)
All but seven equities and all of the funds listed in this September collection of monthly-paying dividend dogs live up to the ideal of annual dividends from $1K invested exceeding their single share price. Here in the MoPay collection lie affordable yet volatile and risky bargains.
Two and one-half years after the 2020 Ides of March dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may now be at hand. There have never been more to choose from. this month's list of 103 was accomplished by holding the maximum yield to under 20% , setting the minimum price per share for selection at $5, and boosting the minimum yield to 2%.
Stocks listed above were suggested only as decent starting points for your MoPay dividend 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.ycharts.com; www.dividend.com; finance.yahoo.com; analyst mean target price by YCharts. Open source dog art from dividenddogcatcher.com.
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This article was written by
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.