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 February the pending demise of my four S&P 500 Aristocrat buy suggestions caught reader attention. Every month some discover errant ticker symbols. This month a reader asked how to identify Rogues in the ReFa/Ro list. This week it’s plain that the three stocks making all three, yield, upside, and gain, leader lists are “rogueish”. Two are of Russian extraction and SBLK is a Marine Shipper of high yield and high risk notoriety.
Last month 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 high-yield equates to high-risk opinion:
“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. “
October readers noted my gaff alleging AT&T’s impending dividend cut might happen in 2021. It’s timed to coincide with the spin-off of AT&T’s Warner assets this year. From my dogcatcher perspective there is ample room to slice the AT&T dividend. With the T share price under $30 and a dividend yield over 7%, the T dividend could be cut in half and still be a handsome attraction for new investors even as old hands abandon the ship of T.
Readers, the past several months, noted the pending absorption of People’s United Financial Inc (PBCT) by M&T Bank Corp (MTB) which makes the purchase of PBCT stock, at this time, effectively an investment in MTB, which is likely why PBCT’s share price continues to vacillate.
More than one writer decried my favoritism for low-priced stocks. They especially dislike my “ideal” stocks whose dividend returns from a $1k investment equal or exceed share price. A prime example is Sirius XM Holdings Inc (SIRI), the satellite radio and pandora music catalog owner, priced now at $6.25 still passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 1.41%! A $1k investment buys about 160 shares. and they’ll throw the owner a dividend of $14.10 which is more than double the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 71 years (and that assumes the satellite radio and subscription music service can survive that long)!
In July, one reader expressed confusion about top-ten by yield summaries concluding each article. How can one top ten group show positive returns, and another be negative? The answer is that every collection of stocks has a different dynamic. Even the “safer” survivors of the dogcatcher safety check usually favor more expensive stocks. Furthermore a monthly shift in prices and yields can change the amount and direction of analyst-estimated projections. Finally, the analysts are guessing just like the rest of us. Mr. Market has more to say about the future than any one of us punters can imagine.
Early last year I learned YCharts uses the following formula to chart forward looking dividend yields: Yield=(last dividend paid x dividend frequency) / price]
Unfortunately that formula presumes the last dividend paid was a regularly occurring dividend. Companies paying variable dividends end up with outlandish spikes and holes by that formula. Accurate data is critical to this audience of dividend hunters I write for using YCharts data. I have suggested YCharts use a spot check against other data sources as a quality control measure. That is what I must do to verify their numbers.
My ongoing gaff confusing volatility with risk in my beta reports was detected in May 2019 and persisted until May 2020. Beta on my charts is now described as risk/volatility. [For those looking for a volatility index on these charts, beta will have to suffice.]
Finally, I am working to untangle the run-on descriptions that introduce my metrics. Such as, “Probable profit-generating trades were identified. I used estimated dividend returns from $1k invested in each of the highest yielding stocks, etc, etc…” The quest for clarity and candor continues…
Note that again this month readers mentioned twenty-six stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:
The ReFaRo March Ideal Dividend Dogs
Above are 26 ideal candidates derived from the 43 tangible results from reader favorite & rogue equities from February 3 – March 8, 2022. YCharts data for this article was collected as of 3/8/22.
Actionable Conclusions (1-10): Brokers Predicted 20.43% To 113% Net Gains By 10 ReFa/Ro Stocks To March 2023
Three 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 the reader-fave stocks, as graded by Wall St. wizards, was deemed 30% accurate. With those three Rogues at top.
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 March 8, 2023 were:
QIWI PLC (QIWI) was projected to net $1,130.04, based on the median of target price estimates from five analysts, plus a projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 22% under the market as a whole. QUIWI is a financial technology company “engaged in operating electronic online payment systems in Russia, Kazakhstan, Moldova, Belarus, Romania, United Arab Emirates (UAE) and other countries,” and thus, qualifies as a Rogue.
Mobile TeleSystems PJSC (MBT) was projected to net $847.63, based on the median of target estimates from eight analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 11% over the market as a whole. “It operates in three segments comprising Russia Convergent, Moscow Fixed Line and MTS Bank”, hence qualifies as a Rogue.
AT&T Inc (T) netted $351.97 based on the median of target price estimates from twenty-one analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 32% under the market as a whole. While cutting its dividend nearly in half sometime this year, T is still a favorite for the dog catcher.
Star Bulk Carriers Corp (SBLK) was projected to net $310.73, based on the median of target price estimates from eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 13% under to the market as a whole. With a variable quarterly dividend and a dividend payment history less than five years, SBLK looks “rogueish”.
Portman Ridge Finance Corp (PTMN) was projected to net $300.53, based on the median of target price estimates from two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% over the market as a whole. PTMN is a Fave.
Starwood Property Trust Inc (STWD) netted $295.44 based on the median of target price estimates from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 54% over the market as a whole. A Fave.
3M Co (MMM) was projected to net $244.89, based on the median of target price estimates from nineteen analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 3% less than the market as a whole. A Fave.
Realty Income Corp (O) was projected to net $213.86 based on the median of target price estimates from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 21% less than the market as a whole. A fave.
HollyFrontier Corp (HFC) was projected to net $208.62, based on the median of target price estimates from fourteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 61% above the market as a whole. Here is a rogue, since HFC has not paid a dividend since March, 2021!
Merck & Co Inc (MRK) was projected to net $204.31 based on the median of target price estimates from twenty-one analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 56% less than the market as a whole. A Fave.
Average net gain in dividend and price was estimated at 41.08% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 1% under the market as a whole. March, 2022, top-ten gainers count four rogues and six faves.
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.”
43 For the Money
Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 3/8/22 for 43 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.
29 ReFa/Ro By Target Gains
Actionable Conclusions (11-20): ReFa/Ro Top (Rogue) Stock, QIWI, Led 43 By Yield into March
The 43 ReFa/Ro sorted by yield included 9 of 11 Morningstar sectors plus two exchange-traded funds [ETF], six closed end investment companies [CEICs], and no exchange traded notes [ETNs], among the selections.
The ten top reader-mentions by yield, were led by the first technology representative , QIWI PLC . then the lonw communication services entity placed second, Mobile TeleSystems PLC . Both of the top mentions are rogues of Russian influence.
Two closed-end investment companies (CEICs) place third and fifth among the top ten, OFS Credit Company Inc (OCCI) , and River North Opportunities (RIV) . The lone industrials offering placed fourth, Star Bulk Carriers Corp . And in sixth place stood the single real estate entity, Annaly Capital Management Inc (NLY) .
One financial services representative placed seventh, Newtek Business Services Corp (NEWT) . Thereafter, two exchange traded funds (ETFs) placed eighth and ninth, Global X Russell 2000 Covered Call (RYLD) , and Global X NASDAQ 100 Covered Call (QYLD) .
Then, one , and one energy sector stock placed tenth, MV Oil Trust (MVO) , which completed the top 10 ReFa/Ro by yield as of March 8, 2022.
Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 17.4% To 94% Increases To March, 2023.
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 Predicted A 52.42% Advantage For 5 Highest-Yield, Lowest-Priced Reader Favored/Rogue Stocks To March, 2023
10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.
As noted above, top 10 ReFa/Ro selected 3/8/22, showing the highest dividend yields, represented: technology (1); communication services (1); CEICs (2); industrials (1); real estate (1); financial services (1); ETFs (2); energy (1).
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 48.51% Vs. (32) 31.83% Net Gains by All 10 To March 2023
$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 52.42% more net gain than $5k invested in all 10. The second lowest priced ReFa/Ro top-yield equity, QIWI PLC, was projected to deliver the best net gain of 113%.
The five lowest-priced ReFa/Ro top-yield dogs for March 8 were: Mobile TeleSystems PJSC; QIWI PLC; Annaly Capital Management Inc; MV Oil Trust; OFS Credit Company Inc, with prices ranging from $5.50 to $12.98 per share.
Five higher-priced ReFa/Ro for March 8 were: RiverNorth Opportunities; Global X NASDAQ Covered Call; Global X Russell 2000 Covered Call; Newtek Business Services Corp; Star Bulk Carriers Corp, whose prices ranged from $15.89 to $28.96.
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 20% accurate on the degree of change.
The 43 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.
Here is the full pack of 43 March ReFa/Ro
(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)
Note that this month readers mentioned twenty-six Dogcatcher Ideal stocks that offer annual dividends from a $1K investment exceeding their single share prices.
26 Dogcatcher Ideal Dogs for March
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.