11 October Inflation Busting Dividend Dogs Ready To Buy

Summary

• March-April, 2022, UBS, Kiplinger, and Barron's analysts and reporters combined to list five-sets of stocks sorted-as: “Inflation Busters for 2022.” Those five-articles revealed 48 equities, with 43 paying-dividends.
• Article-titles were, ’24 PricingPowerPerformers’ [UBS]; ‘7 REITS Raising-Dividends’ [KIP]…; '10 Stocks for Rising Interest-Rates’ [KIP]…; ‘5 Stocks to Stave-off Sizzling Inflation”[KIP]…; ‘6 Dividend Stocks Whip Inflation…[Barron’s]’.
• Those 48 top-inflation busting-stocks ranged 0.13% to 13.16% in annual-yield and ranged 4.00% to 110.26% in one-year price-target-upsides per brokers 10/7/22-23.
• Top-ten 2022 Inflation Busting Dividend stocks boasted net gains from 40.95% to 87.55% as of October 7, 2022-23 per YCharts forward-looking data.
• $5K invested in the October lowest-priced five of ten top-yield Inflation Busters for 2022 showed 1.07% more net-gain than from $5K invested in all ten. Little (lower-priced) stocks lead by a head in this ‘inflation busting’ pack for October.
• Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

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Foreword

This article is based on five Kiplinger, and Barron's articles, aimed at finding "Inflation Busting", stocks for 2022. The title and links to the articles are below:

24 Pricing Power Performers

"With inflation pressures surging, pricing power relative to cost exposures will be a key theme and source of [absolute outperformance] for global equity markets," writes the UBS Equity Strategy team." - by: Dan Burrows April 14, 2022

7 REITS with Rising Dividends

"REIT dividends are expected to post double-digit percentage growth this year, making the yield-friendly sector all the more attractive." - by: Lisa Springer April 13, 2022

10 Stocks for Rising Interest Rates

"The Federal Reserve has signaled in no uncertain terms that interest rates will head higher in 2022. Here are 10 of the best stocks for this environment." - by: Jeff Reeves April 4, 2022

5 Stocks To Stave Off Sizzling inflation

"Income investors like utility stocks for their stability and generous dividends. Here are 12 top-rated ones to watch in the new year." - by: Dan Burrows February 10, 2022

6 Dividend Stocks Whip Inflation

"The hot new investment theme isn't socially nuanced crypto space finance or metaverse charging networks for virtual vehicles. It's dividends-cash payments to shareholders.

To find more dividend growers, Barron's used an approach inspired by the Federal Reserve's so-called dot plot, or path of expected interest rate hikes. We screened the S&P 500 for companies that analysts predict will increase payments nicely in the years ahead. Here are six." - By Jack Hough Updated April 24, 2022 / Original April 22, 2022

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this collection of Kiplinger, and Barron's articles, aimed at finding the "Inflation Busting" stocks for 2022 is perfect for the dogcatcher process. Below are the October 7 "Inflation-Busters" as parsed by YCharts.

The prices of 11 of these 48 Kiplinger, and Barron's dividend selections, made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 11 Dogcatcher Ideal "Inflation Busting" stocks for August are: Arbor Realty Trust Inc (ABR); BHP Group Ltd (BHP); AllianceBernstein Holding (AB); Ares Capital Corp (ARCC); British American Tobacco PLC (BTI); VICI Properties Inc (VICI); PacWest Bancorp (PACW); Navient Corp (NAVI); Fifth Third Bancorp (FITB); HP Inc (HPQ); The AES Corp (AES).

Those eleven all 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 40.95% To 87.55% Net Gains For Ten Top 'Inflation Busting' Dividend Stocks To October 2023

Four of ten top "Inflation Buster" dividend stocks by yield were also among the top-ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below.) Thus, the yield-based forecast for these October dogs was graded by Wall St. Wizards as 40% accurate.

Source: YCharts.com

Estimated dividends from $1,000 invested in each of the highest yielding "Inflation Buster" 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 October, 2023 were:

NexPoint Residential Trust (NXRT) was projected to net $875.50, based on the median of estimates from 7 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% greater than the market as a whole.

Taiwan Semiconductor Manufacturing Co Ltd (TSM) was projected to net $873.23, based on the median of target estimates from 10 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% greater than the market as a whole.

Arbor Realty Trust Inc was projected to net $657.46, 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 87% greater than the market as a whole.

American Tower Corp (AMT) was projected to net $500.96, based on dividends, plus the median of target price estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% under the market as a whole.

British American Tobacco was projected to net $496.74 based on dividends, plus the median of target estimates from 3 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 42% less than the market as a whole.

Alexandria Real Estate Equities Inc (ARE) was projected to net $470.01, based on dividends, plus the median of target price estimates from 11 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% less than the market as a whole.

PacWest Bancorp was projected to net $463.52 based on the median of target price estimates from 9 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 39% greater than the market as a whole.

Broadcom Inc (AVGO) was projected to net $448.03, based on dividends, plus the median of target price estimates from 23 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% above the market as a whole.

Terreno Realty Corp (TRNO) was projected to net $418.00, based on dividends, plus median target price estimates from 11 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% greater than the market as a whole.

Hasbro Inc (HAS) was projected to net $409.46, based on dividends, plus the median of target price estimates from 13 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 18% less than the market as a whole.

The average net gain in dividend and price was estimated at 56.13% on $10K invested as $1K in each of these ten stocks. These gain estimates were subject to average risk/volatility 6% above the market as a whole.

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".

48 Inflation Busters For 2022 Per October Analyst Target Data

Source: YCharts.com

48 Inflation Busters 2022 Dividends By October Yields

Source: YCharts.com

Actionable Conclusions (11-20): Ten Top Inflation Busters By Yield For 2022

Top ten 2022 "Inflation Busting" stocks by yield in October represented five of eleven Morningstar sectors. First place went to the first of two real estate sector representatives, Arbor Realty Trust Inc [1]. The other placed seventh, VICI Properties Inc [7].

Second place was claimed by the lone basic materials member, BHP Group Ltd [2].

Positions three, four, eight and nine were claimed by financial services sector members: AllianceBernstein Holding LP [3]; Ares Capital Corp [4]; PacWest Bancorp [8]; Navient Corp [9].

Two consumer defensive stocks took the fifth and sixth slots on this list, British American Tobacco PLC [5], and Philip Morris International Inc (PM) [6].

Finally, a lone consumer cyclical member placed tenth, Hasbro Inc to complete the top ten "Inflation Busters" for 2022 dividend pack as of October 7.

Actionable Conclusions: (21-30) Ten Top "Inflation Buster" Dividend Payers For 2022 Showed 19.8%-61.41% Upsides While (31) No Down-siders Stumbled In September

Source: YCharts.com

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, median analyst target price estimates became another tool to dig out bargains.

Analysts Forecast A 1.07% Advantage For 5 Highest Yield, Lowest Priced, of 10 Inflation Busting Stocks for 2022

Ten top Kiplinger, and Barron's dividend selections, aimed at finding the "Inflation Busters" for 2022 were culled by yield for this update. Yield (dividend / price) results provided by YCharts did the ranking.

Source: YCharts.com

As noted above, top ten Kiplinger, and Barron's dividend selections, aimed at finding the best Inflation Buster stocks for 2022 screened 10/7/22, showing the highest dividend yields, represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Best Bets for 2022 Dividend Stocks (32) Delivering 36.42% Vs. (33) 36.03% Net Gains by All Ten Come October 2022

Source: YCharts.com

$5,000 invested as $1K in each of the five lowest-priced stocks in the top ten Kiplinger, Barron's, and Dogs of the Dow dividend selections, aimed at finding the "Inflation Busters" for 2022 by yield were predicted, by analyst 1-year targets, to deliver 1.07% more gain than $5,000 invested as $.5K in all ten. The seventh lowest-priced selection, British American Tobacco PLC, was projected to deliver the best net gain of 49.67%.

Source: YCharts.com

The five lowest-priced top-yield Kiplinger, and Barron's dividend selections, aimed at finding the "Inflation Busters" for 2022 as of October 7 were: Arbor Realty Trust Inc; Navient Corp; Ares Capital Corp; PacWest Bancorp; VICI Properties Inc, with prices ranging from $11.85 to $30.64.

Five higher-priced Kiplinger, and Barron's dividend selections, aimed at finding the "Inflation Busters" for 2022 as of September 9 were: AllianceBernstein Holding LP; British American Tobacco PLC; BHP Group Ltd; Hasbro Inc; Philip Morris International Inc, whose prices ranged from $35.22 to $84.65.

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 90% 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 48 Kiplinger and Barron's "Inflation Buster" selections for 2022. The article focuses on the top 30 dividend payers. Thus, nearly one-third of the original list of companies is neglected. Therefore, below is the complete list of 48 stocks grouped by source.

Sources: Kiplinger.com, Barrons.com, YCharts.com

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 11 of these 48 Kiplinger and Barron's dividend selections as "Inflation Buster" stocks for 2022 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 11 Dogcatcher ideal "inflation Busting" dividend stocks for October are:

Source: YCharts.com

Those eleven all 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 "Inflation Buster" 2022 Stocks Could Become Ideal Fair Priced Dogs

Source: YCharts.com

Since eight of the top ten UBS, Kiplinger, and Barron's "Inflation Buster" stocks for 2022 shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those eight plus two at recent prices.

The dollar and percentage differences between recent and fair prices are detailed in the top chart. The current prices are shown in the middle chart with the fair pricing of all ten top dogs conforming to the dogcatcher ideal are detailed in the bottom chart.

With renewed downside market pressure to 23.3%, it is possible for all ten highest-yield UBS, Kiplinger & Barron's Inflation Busting Dividend stocks to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a nice head-start with eight 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.

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. Dog image: Open source dog art from dividenddogcatcher.com.

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.