Readers Name 19 Ready-To-Buy Dividend Dogs For April

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Reader Selections

Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a reader’s 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 flagrantly fouled stock lists not synchronized with the data charted. In January, a reader discovered a ‘Safer’ net gain chart posing as a Monthly Pay chart that even Seeking Alpha Editors missed. In February, the pending demise of my four S&P 500 Aristocrat buy suggestions caught reader attention. Every month some discover errant ticker symbols. Last month, a reader asked how to identify Rogues in the ReFa/Ro list. This week, two Russian stocks, QIWI and MTB were criticized which is a sure sign of Roguishness.

In February, 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 the 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.”

Last 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 (T) Warner assets and finally happened the past week. From my dogcatcher perspective, there was ample room to slice the AT&T dividend. With the T share price under $30 and a dividend yield over 7%, the T dividend was indeed cut in half and still is 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 (PBCT) by M&T Bank Corp (MTB) that too has now taken place and this week MTB is listed due to reader comments.

More than one writer has 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 (SIRI), the satellite radio and Pandora (OTCPK:PNDZF) music catalog owner, priced now at $6.52 still passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 1.35%. A $1k investment buys about 153 shares and they’ll throw the owner a dividend of $13.50 which is more than double the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 74 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 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…

Foreword

Note that this month readers mentioned nineteen stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:

The ReFaRo April Ideal Dividend Dogs

ReFaRo (1A) Ideal Dogs 4/11/22

YCharts

Above are 19 ideal candidates derived from the 41 tangible results from reader favorite & rogue equities from March 8-April 11, 2022. YCharts data for this article was collected as of 4/11/22.

Actionable Conclusions (1-10): Brokers Predicted 23.28% To 50.38% Net Gains By 10 ReFa/Ro Stocks To April 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 April 11, 2023, were:

ReFaRo (1B) Gainers To 4/11/23

YCharts

Broadmark Realty Capital Inc (OTCPK:BMRK) was projected to net $503.77, based on the median of target price estimates from two analysts, plus dividends, less broker fees. A Beta number was not available for BMRK. Yet, it is a fave.

Cherry Hill Mortgage Investment (CHMI) was projected to net $495.40, based on the median of target price estimates from two analysts, plus a projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% over the market as a whole. It’s a fave.

AT&T (T) netted $416.65 based on the median of target price estimates from twenty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% under the market as a whole. Despite cutting its dividend about in half this year, T is still a favorite for the dog catcher.

Citigroup (C) was projected to net $347.91, based on the median of target estimates from twenty-four analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 67% over the market as a whole. C is a fave.

Farmers National Banc Corp (FMNB) was projected to net $325.03, based on the median of target price estimates from four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% under the market as a whole. This is a fave.

British American Tobacco PLC (BTI) netted $313.58 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 29% under the market as a whole. A Fave.

Portman Ridge Finance (PTMN) was projected to net $263.14, 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.

Ellington Residential Mortgage REIT (EARN) was projected to net $252.09, based on the median of target price estimates from two analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 76% greater than the market as a whole. A Fave.

Leggett & Platt (LEG) was projected to net $246.71 based on the median of target price estimates from four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% more than the market as a whole. A fave.

Cisco Systems (CSCO) was projected to net $232.77 based on the median of target price estimates from twenty-four 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.

Average net gain in dividend and price was estimated at 33.97% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 2% over the market as a whole. April 2022, top-ten gainers count no rogues and ten faves.

ReFaRo (2) Dog 4/11/22 Open source dog art DDC8 from dividenddogcatcher.com

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.”

41 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 4/11/22 for 41 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

ReFaRo (3A) 28 Target Gains 4/11/22-23

YCharts

Actionable Conclusions (11-20): ReFa/Ro Top (Rogue) Stock, QIWI, Led 41 By Yield into April

ReFaRo (3B) 41 by Yield 4/11/22-23

YCharts

The 41 ReFa/Ro sorted by yield included all 11 Morningstar sectors plus no exchange-traded funds [ETF], one closed-end investment company [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 [1], a rogue.

Then, the first of three financial services representatives placed second, North American Financial 15 Split (OTC:FNCSF) [2]. The other financials placed sixth and tenth, Newtek Business Services (NEWT) [6], and Portman Ridge Financial Corp [10]

The rogue communication services entity placed third, Mobile TeleSystems (MBT) [3]. Thus, two of three top mentions are rogues of Russian influence.

Two real estate entities placed fourth and seventh, Cherry Hill Mortgage Investment [4], and Ellington Residential Mortgage REIT [7].

Then, two energy sector stocks placed fifth, and ninth, MV Oil Trust (MVO) [5], and San Juan Basin Royalty Trust (SJT) [9].

Finally, a single closed-end investment company (CEIC) placed eighth among the top ten, Oxford Lane Capital (OXLC) [8], which completed the top 10 ReFa/Ro by yield as of April 11, 2022.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 16.62% To 114.46% Increases To April, 2023.

ReFaRo (4) Upsides 4/11/22-23

YCharts

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. In this list, the top stock QIWI price has dropped due to sanctions on Russian financial entities. Therefore the analyst rankings for QIWI and MTB are both light-years behind current financial realities.

Analyst Targets Indicated A 6.84% Disadvantage For 5 Highest-Yield, Lowest-Priced Reader Favored/Rogue Stocks To April 2023

10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

ReFaRo (5) 10List 4/11/22-23

YCharts

As noted above, top 10 ReFa/Ro selected 4/11/22, showing the highest dividend yields, represented: technology (1); financial services (3); communication services (1); real estate (2); energy (2); CEICs (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 16.46% Vs. (32) 17.67% Net Gains by All 10 To April 2023

ReFaRo (6) 10Gains 4/11/22-23

YCharts

$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 6.84% less net gain than $5k invested in all 10. The ninth lowest-priced ReFa/Ro top-yield equity, Portman Ridge Finance, was projected to deliver the best net gain of 26.31%.

ReFaRo (7) 10 By Price 4/11/22-23

YCharts

The five lowest-priced ReFa/Ro top-yield dogs for April 11 were: Mobile TeleSystems PJSC; North American Financial 15 Split; QIWI PLC; Oxford Lane Capital; Cherry Hill Mortgage Investment, with prices ranging from $5.50 to $7.36 per share.

Five higher-priced ReFa/Ro for April 11 were: San Juan Basin Royalty Trust; Ellington Residential Mortgage REIT; MV Oil Trust; Portman Ridge Finance; Newtek Business Services, whose prices ranged from $9.00 to $25.09.

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 12% accurate on the degree of change.

The 41 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 41 April ReFa/Ro

(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)

ReFaRo (8) 41 By Ticker & Members 4/11/21-23

SeekingAlpha

Note that this month readers mentioned nineteen Dogcatcher Ideal stocks that offer annual dividends from a $1K investment exceeding their single share prices.

19 Dogcatcher Ideal Dogs for April

ReFaRo (1A) Ideal Dogs 4/11/22

YCharts

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

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