April Proclaims 2 Dividend Kings And Princes As Buys

Dog in the crown, in royal clothes, on a natural background. Dog lord, prince, dog power theme

Mariana Mikhailova/iStock via Getty Images

Foreword

As supplement to this article, please note that Dogs of the Dow has published a 2022 list detailing the latest 38 Dividend Kings and 5 Princes. The article, entitled 2022 Dividend Kings List, is on-line now.

While most of this collection of 43 K&Ps is too pricey to justify their skinny dividends, two of the top-ten, by yield, live up to the ideal of offering annual dividends (from a $1K investment) exceeding their single share prices.

In the current market adjustment, it is now possible for Altria Group, Inc (MO), and Leggett & Platt, Incorporated (LEG), to stay fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices at this time.

As we are over two-years removed from the anniversary of the 2020 Ides of March dip, the time to snap-up those two lingering top yield Royal dogs is at hand… unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your position in any of those you then hold.)

Actionable Conclusions (1-10): Analysts Predict 17.53% To 61.21% Top-Ten K&P Net Gains To April, 2023

Two of the ten top K&Ps by yield were verified as being 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, this yield-based April 5 forecast for K&Ps (as graded by Brokers) was 20% accurate.

Estimated dividend returns from $1000 invested in each of these highest yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, produced the 2022-23 data points for the projections below. Note: target prices from lone-analysts were not used. Ten probable profit-generating trades projected to April 5, 2023 are shown below.

K&P (1A) 10GAINERS APR, 22-23

YCharts.com

Lowe’s Companies, Inc (LOW) was projected to net $612.08, based on the median of target price estimates from twenty-seven analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 32% more than the market as a whole.

Stanley Black & Decker, Inc (SWK) netted $434.72 based on a median target price estimate from nineteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 37% more than the market as a whole.

Leggett & Platt, Inc was projected to net $326.55, based on dividends, plus the median of target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% greater than the market as a whole.

ABM Industries Incorporated (ABM) was projected to net $278.33, based on dividends, plus the median of target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 23% greater than the market as a whole.

PPG Industries, Inc (PPG) was projected to net $272.81, based on dividends, plus the median of target price estimates from twenty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 22% greater than the market as a whole.

Target Corporation (TGT) was projected to net $264.31, based on the median of target price estimates from twenty-eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% greater than the market as a whole.

Abbott Laboratories (ABT) was projected to net $179.96, based on a median of target estimates from nineteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% less than the market as a whole.

3M Company (MMM) was projected to net $178.42 based on target price estimates from ten analysts, plus annual dividend, less broker fees. The Beta number showed this estimate is subject to risk/volatility 3% less than the market as a whole.

Illinois Tool Works Inc (ITW) was projected to net $177.19, based on the median of target price estimates from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% more than the market as a whole.

Emerson Electric Co (EMR) was projected to net $175.34 based on dividends, plus the median of target price estimates from twenty-five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 46% greater than the market as a whole.

The average net gain in dividend and price was estimated to be 28.99% on $10k invested as $1k in each of these ten stocks. The average Beta ranking showed these estimates subject to risk/volatility 19% greater than the market as a whole.

K&P (2) KPDOG APR/22 Open source dog art (6) from dividenddogcatcher.com

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,” even if they are “Kings” and “Princes.”

Top 50 Dividend K&Ps By Broker Targets

K&P (3B) 43BYYIELD 1-43APR, 22-23

dogsofthedow.com/YCharts.com

This scale of broker-estimated upside (or downside) for stock prices provides a measure of market popularity. Note: no broker coverage or single broker coverage produced a zero score on the above scale. These broker estimates can be seen as the emotional component (as opposed to the strictly monetary and objective dividend/price yield-driven report below). As noted above, these scores may also be regarded as contrarian.

Top 50 Dividend K&Ps By Yield

K&P (3B) 43BYYIELD 1-43APR, 22-23

dogsofthedow.com/YCharts.com

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The April Dogs of The K&Ps

Top ten K&Ps selected 4/5/22 by yield represented five of eleven Morningstar sectors. In first place was Altria Group Inc. [1], the tops of four consumer defensive representatives listed. The others placed second, sixth, and tenth, Universal Corporation (UVV) [2], Kimberly-Clark Corporation (KMB) [6], and The Coca-Cola Company (KO) [10].

Thereafter, two consumer cyclical representative took the third and ninth places, Leggett & Platt Inc [3], and Genuine Parts Company (GPC)[9]. Then the industrials sector K&P leader placed fourth, 3M Co [4].

Following, in fifth place, was the first of two utilities, Northwest Natural Holding Company (NWN) [5], and in eighth place, Black Hills Corporation (BKH) [8]. Then, a lone real estate representative placed seventh, Federal Realty Investment Trust (FRT) [7], to complete these April K&P top-ten, by yield.

K&P (4) UP/DNSIDES APR, 22-23

YCharts.com

Actionable Conclusions: (21-30) Ten K&P’s Showed 14.84% To 42.3% Upsides To April, 2023; (31) On The Downside Were Two -0.78% and -11.8% Losers

To quantify top-yield rankings, analyst median-price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, analyst median price-target-estimates became another tool to dig-out bargains.

Analysts Estimated A 10.86% Advantage For 5 Highest Yield, Lowest Priced, of Top-Ten Dividend K&Ps To April, 2023

Ten top K&Ps were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

K&P (5)10LIST APR 22-23

YCharts.com

As noted above, top ten K&Ps selected 4/5/22 showing the highest dividend yields represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Dividend K&Ps (32) Delivering 13.15% Vs. (33) 11.86% Net Gains by All Ten by April, 2023

K&P (6) 10GAINS APR, 22-23

YCHarts.com

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend K&Ps kennel by yield were predicted by analyst 1-year targets to deliver 10.86% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced K&Ps top-yield stock, Leggett & Platt, Inc was projected to deliver the best net gain of 32.66%.

K&P (7)10BYPRICE APR, 22-23

YCharts.com

The five lowest-priced top-yield Dividend Kings and Princes as of April 5 were: Leggett & Platt Inc; Northwest Natural Holding Co; Altria Group Inc; Universal Corp; Coca-Cola Co, with prices ranging from $35.33 to $62.47

The five higher-priced top-yield Dividend Kings and Princes for April 5 were: Black Hills Corp; Federal Realty Investment Trust; Kimberly-Clark Corp; Genuine Parts Co; and 3M Co, whose prices ranged from $76.80 to $148.90.

This 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, however, since analysts are historically only 20% to 90% accurate on the direction of change and just 0% to 10% accurate on the degree of change.

Afterword

If somehow you missed the suggestion of the two stocks ripe for picking at the start of the article, here is a repeat of the list at the end:

The following 2 (as of 4/5/22) realized the ideal of offering annual dividends from a $1K investment exceeding their single share prices: Altria Group, Inc, and Leggett & Platt, Inc.

Price Drops or Dividend Increases Could Get All Ten Top Dividend K&P Dogs Back to “Fair Price” Rates For Investors

K&P (8)CurrentVSFairPrices APR 22-23

YCharts.com

Since two of the top ten Dividend K&P shares are now priced less than the annual dividends paid out from a $1K investment, the top chart below compares those two plus eight at current prices. Fair pricing (when all ten top dogs conform to the ideal) is displayed in the middle chart. Finally, the dollar and percentage differences between current and fair prices are revealed in the bottom chart. Note that UVV was just $2.27 away from the Fair price mark as of April 5, and NWN was $7.38 over the mark.

Dividend Kings and Princes Alphabetical by Ticker Symbol

K&P (9) AlphaListByTicker APR, 22-23

Dogs of the Dow

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.

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