Buy 9 Harvest-Time October Dividend Dogs

Foreword

This article is based on six Kiplinger investing articles aimed at revealing ‘the best’ for the rest of 2022:

19 High Upside Potential Stocks

S&P Global Market Intelligence data screened the S&P 500 for stocks with Strong Buy consensus recommendations and implied upside of at least 20% in the next 12 months or so, based on share prices and analysts’ average price targets as of Sept. 21. -By Dan Burrows, September, 2022

10 Best Marijuana Stocks

10 picks look like the best marijuana stocks (and funds) to benefit from this ongoing growth and maturation. -By Will Ashworth, September, 2022

10 High-Paying Dividend Stocks

For a list of quality firms, we looked for companies with solid fundamentals, generous yields and backing from the analyst community. These are worth a closer look. -By Will Ashworth, September, 2022

5 First Rate Retail Stocks

TipRanks database shortlists five retail stocks that Wall Street analysts are still bullish on. Each name boasts a Strong Buy rating and offers a significant upside potential to current levels based on their consensus price targets. – By Shirilekha Pethe, September, 2022

10 Best Green Energy Stocks

Here are 10 of the best green stocks for investors looking to cash in on the trend toward sustainability. Included in the list are names from a variety of sectors and industries and all are well-liked by the analyst community. – By Mike Adams September, 2022

UBS’s 43 Top Stocks for a Volatile Market

UBS Compiled a list of its highest-conviction ideas in this tumultuous environment, what UBS calls its “highest-conviction calls in a volatile market.” We used industry analysts’ average 12-month price targets rather than target prices provided solely by UBS. – By Dan Burrows, September, 2022

Any collection of stocks is more clearly understood when subjected to this yield-based (dog catcher) analysis, these six Kiplinger articles projecting ‘top’ reliable dividend stocks for investors are perfect for the dogcatcher process. Here is the October 12 data for 52 dividend paying stocks of 84 screened and the 9 living up to the dogcatcher ‘ideal’ in this Kiplinger collection.

The Ides of March 2020 plunge in the stock market took its toll on stocks over two years and seven months ago. However, continued escalation in prices for these fifty-two dividend stocks made the possibility of owning productive dividend shares from this collection more remote for first-time investors.

October, 2022 shows a glimmer of light from nine stocks emerging as dogcatcher ideal candidates. They are: Dorian LPG Ltd (LPG); Altria Group Inc (MO); New York Community Bancorp Inc (NYCB); Douglas Emmett Inc (DEI); The Scotts Miracle-Gro Co (SMG); Williams Companies Inc (WMB); Clearway Energy Inc (CWEN); Corning Inc (GLW); Brookfield Renewable Partners LP (BEP); Levi Strauss & Co (LEVI). Their prices settled between $15 and $360 below the annual dividend payout from a $1K investment.

Actionable Conclusions (1-10): Brokers Estimated Top-Ten Kiplinger Harvest-Time Dividend Stocks Could Net 45.72% to 125.31% Gains By October 2023

Four of the tops-by-yield Kiplinger Harvest-Tine Stocks (tinted in the chart below) were also the top gainers for the coming year based on analyst 1-year targets. Thus, the top yield dog strategy for this group, as graded by analyst estimates for this month, proved 40% accurate.

Estimated dividend-returns from $1000 invested in each of the highest-yielding stocks and their aggregate one-year analyst median-target prices, as reported by YCharts, created the 2022-23 data points. However, one year target-prices by lone analysts were not counted. The resulting ten probable best profit-generating Harvest-Time Stocks projected to October 12, 2023, by that reckoning, were:

Spectrum Brands Holdings (SPB) netted $1,253.09 based on estimates from 7 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 46% greater than the market as a whole.

The Scotts Miracle-Gro Co netted $1,100.59 based on dividends plus a median target price estimate from 9 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 45% more than the market as a whole.

Innovative Industrial Properties Inc (IIPR) netted $773.46 based on the median of target estimates from 6 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% greater than the market as a whole.

Dorian LPG Ltd netted $677.34 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 6% more than the market as a whole.

Broadcom Inc (AVGO) netted $549.34 based on the median of target estimates from 23 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% greater than the market as a whole.

Douglas Emmett Inc net $486.12 based on the median of target estimates from 14 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% less than the market as a whole.

Levi Strauss & Co netted $480.62 based on the median of target prices estimated by 13 analysts, plus estimated dividends, less broker fees. A Beta number was not available for LEVI.

Popular Inc (BPOP) netted $478.03 based on the median of target estimates from 6 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 11% less than the market as a whole.

Brookfield Renewable Partners LP netted $472.08 based on estimates from 14 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 16% less than the market as a whole.

Alexandria Real Estate Equities (ARE) netted $457.18 based on the median of target estimates from eleven analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% less than the market as a whole.

The average net-gain in dividend and price was 67.28% on $10K invested as $1K in each of these ten Kiplinger Harvest-Time stocks. This gain estimate was subject to average risk/volatility 14% greater than the market as a whole.

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. Thus, the highest yielding stocks in any collection became known as “dogs.” More specifically, these are, in fact, best called, “underdogs”.

Top 52 Harvest-Time Dividend Stock Picks By Broker Targets

This scale of broker-estimated upside (or downside) for stock prices provides a scale of market popularity. Note: no broker coverage or 1 broker coverage produced a zero score on the above scale. This scale can be taken as an emotional component as opposed to the strictly monetary and objective dividend/price yield-driven report below. As noted above, these scores may also be taken as contrarian.

Top 52 Harvest-Time Dividend Stock Picks By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The October Harvest-Time Dividend Dog Pack

Top ten Harvest-Time Dividend Stocks selected 10/12/22 by yield represented just five of eleven Morningstar sectors. First place was secured by the first of three energy representatives, Dorian LPG Ltd [1]. The others placed second and fourth, Diamondback Energy Inc (FANG) [2], and Pioneer Natural Resources Co (PXD) [4].

Third place was secured by the first of two consumer defensive members, Altria Group Inc [3], while the other took tenth, Philip Morris International (PM) [10].

The lone financial services representative placed fifth, New York Community Bancorp Inc [5]. Two real estate members placed sixth, and seventh: Innovative Industrial Properties Inc [6], and Douglas Emmett Inc [7].

Finally, two basic materials concerns placed eighth and ninth: The Scotts Miracle-Gro Co [8], and LyondellBasell Industries NV (LYB) [9], to complete this Harvest-Time Dividend Stock top ten, by yield, for October.

Actionable Conclusions: (21-30) Ten Harvest-Time Dividend Stocks Showed 39.98% To 122.25% Upsides To October 2023, With (31) No 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 23.45% Advantage For 5 Highest Yield, Lowest Priced of Top-Ten Harvest-Time Stocks To October 2023

Ten top Harvest-Time Stocks were culled by yield for this monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top-ten Harvest-Time Dogs selected 10/12/22, showing the highest dividend yields, represented five of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Harvest-Time Dividend Stocks (33) Delivering 57.41% Vs. (34) 46.50% Net Gains by All Ten by October 2023

$5,000 invested as $1K in each of the five lowest-priced stocks in the top ten Harvest-Time dividend pack by yield were predicted by analyst 1-year targets to deliver 23.45% more gain than $5,000 invested as $.5K in all ten. The fourth lowest-priced Harvest-Time top-yield stock, The Scotts Miracle-Gro Co, was projected to deliver the best net gain of 110.06%.

The five lowest-priced top-yield Harvest-Time dividend stocks for October 12 were: New York Community Bancorp; Dorian LPG Ltd; Douglas Emmett Inc; The Scotts Miracle-Gro Co; Altria Group Inc, with prices ranging from $8.38 to $44.75

The five higher-priced top-yield Harvest-Time dividend stocks for October 12 were: LyondellBasell Industries LP; Philip Morris International Inc; Innovative Industrial Properties Inc; Diamondback Energy Inc; Pioneer Natural Resources Co, whose prices ranged from $77.23 to $246.89.

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, 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.

Afterword

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

In the current market advance, dividends from $1K invested in the eight stocks listed above met or exceeded their single share prices as of 7/27/22.

As we are seven months past the second anniversary of the 2020 Ides of March dip, the time to snap up those nine top yield Harvest-Time dogs is now… unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your holdings.)

To learn which of these nine ideally-priced opportunities are “safer” to buy (namely which have ready cash to pay their dividends). Use the last bullet in the Summary above to navigate to my dividend dogcatcher follow-up article after October 19 in the SA Marketplace.

Recent vs Fair Top Ten Harvest-Time Stock Prices

Since five of the top-ten Harvest-Time Dividend shares are priced less than the annual dividends paid out from a $1K investment, the following charts compare the five at recent prices with the break-even pricing of all ten. Starting with the dollar and percent variants to all ten top dogs conforming to (but not exceeding) the dogcatcher ideal in the top chart, the recent prices are documented in the middle chart and the fair prices calculated in the bottom chart.

The top chart is an indicator of how low the five non-ideal stocks must adjust to become fair-priced. Which means conforming the standard of dividends from $1K invested exceeding the current single share price.

All 97 Harvest-Time Stocks by Author

The analysis above focuses primarily on the top yield 30 Harvest-Time selections. Below is the list of all the stocks including the duplicate listings, by author.

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 Harvest-Time 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.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.