Readers Recognize 22 Buyable Dividend Dogs In September

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 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 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. Earlier this year, a reader asked how to identify Rogues in the ReFa/Ro list. In June, high yields were criticized that they are sure signs of Roguishness. Not true, they are sure signs of high yield, how long TBD.

Reader suggestions of buy and hold dividend stocks are most welcome and sure to be reported on my ReFaRo posts. That’s my ultimate goal, of course, to find ten or twenty sure-fire long-term dividend payers purchased when their single share prices are lower than the dividend paid from $1K invested. Suggestions, please! We’re trying to predict the future here; Kings and Aristocrats might hold up but maybe too old and feeble to last.

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 opinion that high-yield equates to high-risk:

“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 (T) impending dividend cut might happen in 2021. It was timed to coincide with the spin-off of AT&T’s Warner assets and finally happened in 2022.

More than one writer has decried my favoritism for low-priced stocks. They especially dislike my “ideal” stocks with dividend returns from a $1K investment equaling or exceeding share price. A prime example is Sirius XM Holdings Inc (SIRI), the satellite radio and Pandora music catalog owner, priced now at $5.92 easily passes my test (of dividends from $1K invested exceeding share price) with a forward dividend of 1.47%! A little over $1K investment now buys 169 shares, and they’ll throw the owner a return more than double the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 68 years (and that assumes the satellite radio and subscription music service can survive that long)!

Last month, a reader said a $14.70 dividend on a $1K investment was too small. I point out that holders of AAPL stock garner about $6.20 in dividends from $1K invested.

Every month readers grumble that they can’t find my six previous Dogs of the Week portfolios in my Dividend Dogcatcher service on the SA Marketplace site. This year SA has listed all the postings on my Dogcatcher service by date. So to find the summary and reference guide to each portfolio, look at:

August 22, 2015 for I

October 13, 2016 for II

September 12, 2017 for III

September 13, 2018 for IV (Ivy)

September 8, 2019 for V (Volio)

September 12, 2020 for VI (Vista)

October 10, 2021 for VII (Viital).

Incidentally, the VIII portfolio of Dividend Dogs for each week (Viking) launched on October 3, 2022. The Viking SA Marketplace reports will gather after November 4.

Foreword

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

The ReFaRo September Ideal Dividend Dogs

Above are the 22 ideal candidates derived from the 42 tangible results from reader favorite & rogue equities from August 31-September 30, 2022. YCharts data for this article was collected as of 10/4/22.

Actionable Conclusions (1-10): Brokers Imagined 46.86% To 340.67% Net Gains From 10 ReFa/Ro Stocks To September 2023

Six 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 reader-fave stocks, as graded by Wall St. wizards, was deemed 60% accurate.

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 October 4, 2023 were:

AG Mortgage Investment Trust Inc (MITT) was projected to net $3,406.66, based on the median of target price estimates from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 66% over the market as a whole. It’s a Rogue with a dividend likely to be reduced.

SuRo Capital Corp (SSSS) netted $2,641.66 based on the median of target price estimates from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 62% over the market as a whole. SSSS is a Rogue; watch out for falling dividends!

ZIM Integrated Shipping Services Ltd (ZIM) netted $1,853.84 based on the median of target price estimates from 7 analysts, plus dividends, less broker fees. A Beta number was not available for ZIM. It’s a Rogue.

Koninklijke Philips NV (PHG) was projected to net $857.80, based on the median of target estimates from 2 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% under the market as a whole. PHG is a Fave.

Innovative Industrial Properties Inc (IIPR) was projected to net $723.90, based on the median of target price estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 56% over the market as a whole. This is a Rogue.

OFS Capital Corp (OFS) was projected to net $587.03, based on the median of target price estimates from 2 analysts, plus a projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 76% over the market as a whole. It’s a Rogue.

Ready Capital (RC) was projected to net $585.18 based on the median of target price estimates from 7 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 19% less than the market as a whole. A Rogue.

GSK plc (GSK) was projected to net $557.23, based on the median of target price estimates from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 53% under the market as a whole. GSK is a Fave.

Arbor Realty Trust Inc (ABR) was projected to net $526.54, based on the median of target price estimates from 5 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 77% under the market as a whole. A Fave.

Ally Financial Inc (ALLY) was projected to net $468.55 based on the median of target price estimates from 19 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 34% over the market as a whole. A Rogue to many readers.

Average net gain in dividend and price was estimated at 122.08% on $10K invested as $1K in each of these ten stocks. This gain estimate was subject to average risk/volatility 19% over the market as a whole. September 2022 top-ten gainers count seven Rogues, and three Faves.

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.”

42 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 10/4/22 for 42 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.

41 ReFa/Ro By Target Gains

Actionable Conclusions (11-20): ReFa/Ro Top (Rogue) Stock, SSSS, Led 36 By Yield Through September

The 36 ReFa/Ro sorted by yield included 10 of 11 Morningstar sectors plus 0 closed-end investment companies [CEICs], 0 exchange traded funds [ETF], and 0 exchange traded notes [ETNs], among the selections.

The ten top reader-mentions by yield, were led by the first of four financial services representatives, SuRo Capital Corp [1]. The other three financial services members placed fifth, sixth, and tenth, OFS Capital Corp [5], FS KKR Capital Corp (FSK) [6], and Main Street Capital Corp (MAIN) [10].

In second place was the lone industrials representative in the top ten, ZIM Integrated Shipping Services Ltd [2]

Then, three real estate representatives placed third, fourth and seventh, AG Mortgage Investment Trust Inc [3], Ready Capital Corp [4], and Arbor Realty Trust Inc [7].

One energy entity placed eighth, Global Partners LP (GLP) [8]. Finally, the top consumer defensive representative placed ninth, Altria Group Inc (MO) [9], which completed the top 10 ReFa/Ro by yield as of September 30, 2022.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 27.12% To 213.98% Increases To September 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 Indicated A 47.00% Advantage For 5 Highest-Yield, Lowest-Priced ReFa/Ro Stocks To September 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 10/4/22, showing the highest dividend yields represented: financial services (4); industrials (1); real estate (3); energy (1); consumer defensive (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 154.94% Vs. (32) 105.40% Net Gains by All 10 To September 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 47.00% more net gain than $5K invested in all 10. The second lowest-priced ReFa/Ro top-yield equity, AG Mortgage Investment Trust Inc, was projected to deliver the best net gain of 340.67%.

The five lowest-priced ReFa/Ro top-yield dogs for October 4 were: SuRo Capital Corp; AG Mortgage Investment Trust Inc; OFS Capital Corp; Ready Capital Corp; Arbor Realty Trust Inc, with prices ranging from $4.22 to $12.86 per share.

Five higher-priced ReFa/Ro as of October 4 were: FS KKR Capital Corp; ZIM Integrated Shipping Services Ltd; Global Partners LP; Main Street Capital Corp; Altria Group Inc, whose prices ranged from $18.63 to 42.50.

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 15% accurate on the degree of change.

The 42 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 42 August ReFa/Ro.

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

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

22 Dogcatcher Ideal Dogs for September

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.

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