12 Buyable Inflation-Busting September Dividend Stocks
Summary
- March-April, 2022, UBS, Kiplinger, and Barron's listed five sets of stocks sorted as: “Inflation-Busters.” Those five articles revealed 48 equities, with 43 paying dividends. This near 1.5-yr-old list still beats back inflation.
- 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]’.
- September 2023, those 48 top inflation busting-stocks ranged 0.04% to 10.93% in annual yield and ranged 1.05% to 55.34% in one-year price target upsides, per broker-analysts.
- Top-ten Inflation-Busting Dividend stocks boasted net gains from 26.55% to 58.46% per YCharts forward-looking data 8/11/23.
- $5k invested in the September lowest-priced five of ten top-yield Inflation-Busters showed 20.98% LESS net gain than from $5k invested in all ten. Bigger (higher-priced) stocks led the field by over two lengths in this ‘inflation busting’ September pack.
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ThomasVogel
Foreword
This article is based on five UBS, Kiplinger, and Barron's articles, aimed at finding "Inflation Busting", stocks since 2022. The author believes these stock suggestions are prescient into the year 2024 as banks, lenders, and crypto exchanges succumb to rising fed interest rates. The title and links to the articles follow:
"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
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. They screened the S&P 500 for companies that analysts predict will increase payments nicely in the years ahead. The came up with 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 (dogcatcher) analysis, this collection of UBS, Kiplinger, and Barron's articles, aimed at identifying "Inflation-Busting", stocks is perfect for the dogcatcher process. Below are the 48 September 12, 2023 "Inflation-Busters" as parsed by YCharts.
The prices of 12 of these 48 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
Those 12 Dogcatcher Ideal "Inflation Busting" stocks for July are: Arbor Realty Trust Inc. (ABR); Ares Capital Corp. (ARCC); British American Tobacco PLC (BTI); AllianceBernstein Holding (AB); BHP Group Ltd (BHP); VICI Properties Inc (VICI); Fifth Third Bancorp (FITB); Pfizer Inc. (PFE); NexPoint Residential Trust Inc. (NXRT); The AES Group (AES); Navient Corp. (NAVI); HP Inc. (HPQ).
Those twelve all live up to the ideal of annual dividends from $1K invested exceeding their single share prices. Many investors see this condition as "look closer to maybe buy" opportunity.
In a ranking of three-year price gains of the top 30 Inflation busters by yield, four of the Ideal selections stood out: BHP Group, NexPoint Residential Trust; Pfizer Inc; British American Tobacco.
Actionable Conclusions (1-10): Analysts Estimated 26.55% To 58.46% 'Inflation Busting' Dividend Top 10 Net Gains To September, 2024
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 September dogs was graded by Wall St. Wizards as 40% accurate.
Source: YCharts.com
Estimated dividends from $1000 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 September 2024 were:
The AES Corp was projected to net $584.58, 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 2% less than the market as a whole.
Alexandria Real Estate Equities Inc. (ARE) was projected to net $428.46, based on dividends, plus the median of target price estimates from 10 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% under the market as a whole.
NexPoint Residential Trust was projected to net $413.33, based on dividends, plus the median of target price estimates from 6 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% over the market as a whole.
British American Tobacco was projected to net $408.43 based on dividends, plus the median of target estimates from 2 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 43% less than the market as a whole.
Pfizer Inc was projected to net $329.36, 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 40% under the market as a whole.
CVS Health Corp. (CVS) was projected to net $326.06 based on the median of target price estimates from 25 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 37% less than the market as a whole.
American Tower Corp. (AMT) was projected to net $310.23, based on the median of target estimates from 16 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% less than the market as a whole.
Discover Financial Services (DFS) was projected to net $308.15, based on the median of target price estimates from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% greater than the market as a whole.
Taiwan Semiconductor Manufacturing Co Ltd (TSM) was projected to net $303.30, based on dividends, plus median target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% over the market as a whole.
AllianceBernstein Holding LP was projected to net $265.54, based on the median of estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 29% greater than the market as a whole.
The average net gain in dividend and price was estimated at 36.77% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 8% under 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 2023-24 Per September Analyst Target Data
Source: YCharts.com
48 Inflation Busters 2023-24 By September Yields
Source: YCharts.com
Actionable Conclusions (11-20): Ten Top Inflation Busters By Yield For August 2023-24
Top ten 2023-24 "Inflation Busting" stocks by yield in September represented five of eleven Morningstar sectors. First place went to the first of three real estate sector representatives, Arbor Realty Trust Inc [1]. The other two placed seventh, and tenth, VICI Properties Inc [7], and NexPoint Residential Trust [10].
Three slots were claimed by financial services sector members: Ares Capital Corp [2]; AllianceBernstein Holding LP [4]; Fifth Third Bancorp [8].
Two consumer defensive stocks took the third and sixth slots on this list, British America Tobacco PLC [3], and Philip Morris International Inc. (PM) [6].
Fifth place was claimed by the single basic materials rep in the top ten,
BHP Group Ltd [5].
Finally, one healthcare member placed ninth, Pfizer Inc [9] to complete the top ten "Inflation Busters" for 2023-24 dividend pack as of September 12.
Actionable Conclusions: (21-30) Ten Top "Inflation Buster" Dividend Payers For 2023-24 Showed 20.90%-5561% Upsides While (31) No Down-siders Were Recorded For 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 20.98% Disadvantage For 5 Highest Yield, Lowest Priced, of 10 Inflation Busting Stocks for September 2023-24
Ten top UBS, Kiplinger, and Barron's dividend selections, aimed at finding the "Inflation Busters" for 2023-24 were culled by yield 9/12/23 for this update. Yield (dividend / price) results provided by YCharts did the ranking.
Source: YCharts.com
As noted above, top ten UBS, Kiplinger, and Barron's dividend selections, aimed at finding the best Inflation Buster stocks, as screened 9/12/23, 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 Inflation Buster Dividend Stocks for 2023-24 (32) Delivering 20.3% Vs. (33) 25.69% Net Gains by All Ten Come September 2024
Source: YCharts.com
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten UBS, Kiplinger, and Barron's dividend selections, aimed at finding the "Inflation Busters" for 2022-23 by yield, were predicted, by analyst 1-year targets, to deliver 20.98% LESS gain than $5,000 invested as $.5k in all ten. The sixth lowest-priced selection, British American Tobacco PLC, was projected to deliver the best net gain of 40.84%.
Source: YCharts.com
The five lowest-priced top-yield UBS, Kiplinger, and Barron's dividend selections, aimed at finding "Inflation Busters" as of September 12 were: Arbor Realty Trust Inc; Ares Capital Corp; Fifth Third Bancorp; VICI Properties Inc; AllianceBernstein Holding LP, with prices ranging from $15.74 to $32.23.
Five higher-priced UBS, Kiplinger, and Barron's dividend selections, aimed at finding "Inflation Busters" as of September 12 were: British American Tobacco PLC; Pfizer Inc; NexPoint Residential Trust; BHP Group Ltd; Philip Morris International Inc, whose prices ranged from $33.49 to $94.45.
The distinction between five low-priced dividend dogs and the general field of ten projected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of expected 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 15% to 85% 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 UBS, Kiplinger, and Barron's "Inflation Buster" selections for 2022-24. The article focuses on the top 30, or so, 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 12 of these 48 Kiplinger, and Barron's dividend selections, as "Inflation Buster", stocks for 2023-24 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
Those 12 Dogcatcher ideal "inflation Busting" dividend stocks for July are:
Source: YCharts.com
Those 12 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.
In a ranking of three-year price gains of the top 30 Inflation busters by yield, four of the Ideal selections stood out: BHP Group, NexPoint Residential Trust; Pfizer Inc; British American Tobacco.
Source: YCharts.com
How Ten Top "Inflation Buster" 2023-24 Stocks Could Become Ideal Fair Priced Dogs
Source: YCharts.com
Since nine of the top-ten Kiplinger, and Barron's "Inflation Buster", stocks for 2023 shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those nine plus one at recent prices.
The dollar and percentage differences between recent and fair prices are detailed in the top chart. The recent 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 25%, 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 huge head-start with nine 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; Yahoo Finance - Stock Market Live, Quotes, Business & Finance News; analyst mean target price by YCharts. Dog image: Open source dog art from Dividend Dog Catcher.
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This article was written by
Fredrik Arnold is a retired quality service analyst sharing investment ideas with a primary focus on dividend yields by utilizing free cash flow and one-year total returns as trading indicators.
He is the leader of the investing group The Dividend Dog Catcher, where he shares a minimum of one new dividend stock idea per week with focus on yield or extraordinary financial circumstances. All ideas are archived and available after weekly announcement. Learn more.Analyst’s Disclosure: I/we have a beneficial long position in the shares of PFE 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.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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