sduben
sduben
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.
Frequently 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. These lists are suggestions, or warnings, not recommendations.
Most valuable to the writer, however, are 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. They are available for members of my Dividend Dogcatcher investing group in the Seeking Alpha marketplace.
In June 2022 high yields were alleged, by one reader, to be sure signs of Rogueishness. Not true, high yields are sure signs of high yield, how long the elevated yield lasts, depends share price and corporate directors. High Beta is the most accurate measure of Rogueishness.
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 may be too old and feeble to last.
In February, 2022 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 mo-pay 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.”
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 Inc (SIRI), the satellite radio and pandora music catalog owner, priced recently at $3.91 easily passes my test (of dividends from $1k invested exceeding share price) with a forward dividend yield of 2.75%! A little over $1k investment now buys 256 shares. and they'll throw the owner a return (from $1k invested) about 7 times the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 36.4 years (and that assumes the satellite radio and subscription music services can survive that long)!
This year, in December 2023 a reader suggested my share price equal or less than the income from a $1k investment was too low. I agree with him that opportunities are lost and that many strong stocks exist at higher prices. For example, even the dividend from $10k invested in Apple Inc could not buy one share of that stock. Plainly nobody buys Apple for the dividend, just growth.
However I was reminded by a comment this week that some readers take “dividends from one $1K invested” to mean the annual return from just one share. If the single share price of a stock is $20 and the annual yield is 3.00% the dividend paid from $1k invested is $30.00 or 1.5 times the single share price.
In January, 2023 the following exchange occurred:
Sorry, but I'm confused. Why does it matter if a stock is $1000 per share and pays a $50 dividend, or $20 per share and pays a $1 dividend. Isn't that the same 5% yield?
But if I'm following your logic, you would like the latter because the total dividend from $1,000 invested is more than the individual share price, but you wouldn't like the former because it isn't.
Am I missing something?
You’re right. Both the $1000 stock paying a $50 dividend and the $20 stock paying a $1.00 dividend cost $20 per dollar of dividend. Thus, neither is preferable because you've still spent $1000 to get $50 in dividends. The difference is entirely in the share count. One share versus 50. Which would you prefer to own?
Should the return from $1k invested exceed single share price? The debate rages, meanwhile dividend investors crave an easy to locate starting point for their initial dividend investment. What price are you paying for your divided? It’s a simple rule of retailing, and the lowest cost per dividend dollar wins (or goes out of business).
The dogcatcher ideal balance point is a sweet spot to use for reference. A rule of thumb, so to speak.
Six months ago a reader made a prediction that PACW would be the next bank to collapse. Your heard it here first!
Late summer, a pause in Fed interest rate hikes left PACW close to surrender but could it hang in when the hikes returned? Its assets, as of December 16, 2023 were acquired by Banc of California. The new entity is now traded under the ticker BANC. PACW is no longer and entity to trade. What bank will be next to fail?
Every month, readers would grumble that they can’t find my nine Dog of the week portfolios in my Dividend Dogcatcher service on the SA Marketplace (now called Investing Groups) site.
This year SA has listed all the postings on my Dogcatcher investing group 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)
October 8, 2022 for VIII (Viking)
October 7, 2023 for IX (Ignition).
Incidentally, the VIII (Viking) portfolio of Dividend Dogs for each week launched on October 3 2022. The Viking SA Investing Groups ‘safer’ stock reports have been gathering since November 4, 2022 and will post its last return on October 4 2024.
My Ignition (DOTW IX) portfolio launched October 6, 2023 will have all its selections in place by October 4, 2024 and post its last return on October 3, 2025.
This winter a reader asked what the XN rating in the Market Cap column of my Yield and Target Price charts means. Here is my summary of those codes:
Dogcatcher Market Cap Codes
L= $10B+
M= $2B-$10B
S= $200M-$2B
XN=<$200M
An observation from April 2023:
“Mr. Arnold, I enjoy reading your many articles and get some great ideas from them. However I find the number of charts are a bit of overkill, many duplicating the info. I'm sure you have your set format and reasons why, but I'd be happy with only two charts; your sort by target gains and your sort by div yield. It would make it a much easier read. Thank You —pmbrandt 15Apr2023”
I’d gladly just submit those two charts and ditch all the verbiage. However, fourteen years ago when I started submitting articles, the SA editorial team said they needed text to go with the graphics and topsy was born.
Still, there are complaints of too many words for little information. No doubt, less is more! I’ll be sure to make my Dividend Kings articles less obfuscating.
Note that in February readers mentioned 22 stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:
source: YCharts
Above are the 22 ideal candidates derived from the 32 tangible results from reader favorite & rogue equities received prior to February 29, 2024. YCharts data for this article was collected as of 3/20/24.
Four reader-favored top-yield February 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 40% 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 2024-25 data points which identified probable profit-generating trades. (Note: one-year target prices by lone analysts were not counted.) Thus, ten probable top February profit-generating trades projected as-of March 20 2025 were:
source: YCharts
Ellington Financial Inc (EFC) was projected to net $339.30, 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 92% over the market as a whole. A Rogue.
Ready Capital Corp (RC) was projected to net $301.64 based on the median of target price estimates from 8 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 39% over the market as a whole. A Rogue.
FS KKR Capital Corp (FSK) was projected to net $248.09 based on the median of target price estimates from 10 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate is subject to risk/volatility 25% greater than the market as a whole. A Rogue.
Realty Income Corp (O) was projected to net $243.06, based on the median of target price estimates from 15 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% less than the market as a whole. O is a fave.
Pfizer Inc (PFE) netted $234.30 based on the median of target price estimates from 23 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 39% under the market as a whole. It’s a favorite.
Triple Point Venture Growth BDC Corp (TPVG) was projected to net $204.71, based on the median of target price estimates from 7 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 80% over the market as a whole. It's a rogue.
Verizon Communications Inc (VZ) was projected to net $184.85, based on the median of target estimates from 26 analysts, plus annual dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 60% under the market as a whole. It's a fave.
Oxford Lane Capital Corp (OXLC) was projected to net $181.20, based only on dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 50% over the market as a whole. A rogue.
Paramount Global (PARA) netted $169.65 based on the median of target price estimates from 26 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 77% over the market as a whole. A rogue.
Kenvue Inc (KVUE) netted $158.31 based on the median of target price estimates from 14 analysts, plus dividends, less broker fees. A Beta number was not available for KVUE. It may be a fave.
Average net gain in dividend and price was estimated at 22.65% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 28% over the market as a whole. February, 2024, top-ten gainers counted six rogues, and four favorites.
Source: Open source dog art from dividenddogcatcher.com
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."
Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 3/20/24 for 32 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.
Source: YCharts
source: YCharts
The 37 ReFa/Ro sorted by yield included 9 of 11 Morningstar sectors, and one ETF.
Ten top reader-mentions by yield in February, were led by the first of six financial services members, Oxford Lane Capital Corp (OXLC) [1], Others placed second, fourth, and sixth to eighth: Triple Point Venture Growth BDC Corp (TPVG) [2]; FS KKR Capital Corp (FSK) [4]; XAI Octagon Floating Rate & Alternative Income Trust (XFLT) [6]; Pimco Dynamic Income Fund (PDI) [7]; Trinity Capital Inc (TRIN) [8].
Then, finally, the first of four real estate representatives placed third, fifth, ninth and tenth: Orchid Island Capital Inc (ORC) [3], AGNC Investment Corp [5], Ellington Financial Inc (EFC) [9], and Ares Commercial Real Estate Corp (ACRE) [10], to fill-out the top 10 February ReFa/Ro by yield as of March 20, 2023 data.
source: 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.
10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.
source: YCharts
As noted above, top 10 ReFa/Ro selected 3/20/24, showing the highest dividend yields in February represented two sectors: financial services (6); real estate (4).
source: 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 13.87% LESS net gain than $5k invested in all 10. The seventh lowest-priced ReFa/Ro top-yield equity, Ellington Financial Inc., was projected to deliver the best net gain of 33.93%.
source: YCharts
Five lowest-priced ReFa/Ro top-yield dogs for February as of March 20 were: Oxford Lane Capital Corp; XAI Octagon Floating Rate and Alternative Income Trust; Ares Commercial Real Estate Corp; Orchid Island Capital Inc; Triple Point Venture Growth BDC Corp, with prices ranging from $5.02 to $9.22 per share.
Five higher-priced ReFa/Ro as of March 20 were: AGNC Investment Corp; Ellington Financial Inc; Trinity Capital Inc; Ellington Financial Corp; FS KKR Capital Corp; PIMCO Dynamic Income Fund, whose prices ranged from $9.59 to $19.05.
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 15% to 85% accurate on the direction of change and just 0% to 15% accurate on the degree of change.
The 32 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.
(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)
source: SeekingAlpha/YCharts
Note that this month readers mentioned twenty-two Dogcatcher Ideal stocks that offer annual dividends from a $1K investment exceeding their single share prices.
source: 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 ReFa/Ro dog stock purchase or sale research process. These were not recommendations.