RTNTF - 25 August Buys Per Ben Graham's Formula

• "Benjamin Graham Value Stocks match the criteria. Benjamin Graham followed." - YCharts Value Screener.
• 33 Graham Formula results reflect Graham's established value-stock detection criteria. Of those, 25 met the dogcatcher ideal of dividends from $1K invested, exceeding their single share stock prices.
• Representing all eleven Morningstar Sectors, all 33 pay regular dividends. Broker-targeted top-ten Graham Formula-found dividend-paying net gains ranged 20.1%-67.06%, topped by TX & CMRE, as of 8/19/22.
• By yield, KEN leads the top-ten Graham formula field of BGFV, TX, VIA, FSK, RIO, BHP, LOMA, HIMX, AKO.B, & KEN. The ten averaged 14.52% yield. Graham's top ten by broker-target-price upsides were LYB, CTRA, PCH, SLG, NTB, AKO.B, HIMX, RIO, CMRE, & TX, averaging 27.86%.
• $5k invested on August 19 in the five top-yield, lowest-priced, Graham formula stocks showed 15.53% LESS net gain than from $5k invested in all top ten. Bigger (higher-priced) equities led the top-ten August Graham Formula-derived dividend dogs by over one and one-half lengths.

Foreword

About the Ben Graham Formula

The Ben Graham Formula strategy contains ultra-stable stocks that will infrequently lose money if held over a long period of time. It was developed based on a screen in Graham's book, The Intelligent Investor. For those who have read the book, it is the "Defensive Investor" screen. It selects stocks that are large in terms of sales and total assets, have a strong track record of earnings and dividend payments, have a reasonable current ratio and level of long-term debt, and have a low valuation given by P/E Ratios and Price to Book Value ratios. - YCharts

While 8 out of this collection of 33 Graham Dividend stocks are too pricey to justify their skinny dividends, 25 of the 33, by yield, live up to the ideal of offering annual dividends (from a $1K investment) exceeding their price per share.

In the current market bounce, the dividends from $1k investments in any of the twenty-five stocks listed above met or exceeded their single share prices as of 8/19/22.

As we are now five months past the second anniversary of the 2020 Ides of March dip, the time to snap up some of the twenty-five top-yield Graham value dogs is now... unless another big bearish drop in price looms ahead. (At which time, your strategy would be to add to your position in any of these you then hold.)

Actionable Conclusions (1-10): Analysts Estimate 20.1% To 67.06% Top Ten Graham Net Gains To August 2023

Four of the ten top Graham Formula picks by yield were verified as also 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 forecast for Graham-derived dividend dogs (as graded by Brokers) was 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. Note: target prices by lone analysts were not used. Ten probable profit-generating trades projected to August 19, 2023 were:

Ternium S.A. ( TX ) was projected to net $670.60, based on a median of target estimates from 12 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% greater than the market as a whole.

Costamare Inc. ( CMRE ) was projected to net $427.44, based on dividends, plus the median of target price estimates from 3 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% over the market as a whole.

Himax Technologies, Inc. ( HIMX ) was projected to net $466.30, based on dividends, plus the median of target price estimates from 4 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 84% greater than the market as a whole.

Rio Tinto Group ( RIO ) was projected to net $420.26, based on dividends, plus the median of target price estimates from 4 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 34% less than the market as a whole.

Embotelladora Andina S.A. ( AKO.B ) was projected to net $408.53, based on the median of target price estimates from eight analysts, plus dividends, less broker fees. The Beta number 48% under the market as a whole.

SL Green Realty Corp. ( SLG ) netted $266.04 based on a median target price estimate from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% greater than the market as a whole.

The Bank of N.T. Butterfield & Son Limited ( NTB ) was projected to net $250.71 based on dividends, plus the median of target price estimates from 5 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 54% more than the market as a whole.

Coterra Energy Inc. ( CTRA ) was projected to net $221.32, based on the median of target price estimates from 25 analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 93% less than the market as a whole.

PotlatchDeltic Corporation ( PCH ) was projected to net $212.12, based on dividends, plus the median of target price estimates from 7 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% greater than the market as a whole.

ICL Group Ltd ( ICL ) was projected to net $201.05, based on a median target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% over the market as a whole.

The average net gain in dividend and price was estimated to be 35.91% on $10k invested as $1k in each of these ten stocks. The average Beta showed these estimates subject to risk/volatility 24% greater than the market as a whole.

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".

Top 33 Graham Value Formula 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 33 Graham Value Formula Picks By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The August Dogs of The Graham Formula Pack

Top ten Graham stocks selected 8/19/22 by yield represented six of eleven Morningstar sectors. First place was secured by the first of two utilities representatives, Kenon Holdings Ltd. ( KEN ) [2], and the other placed eighth, Via Renewables, Inc. ( VIA ) [8].

In second place was the lone consumer defensive stock, Embotelladora Andina S.A. [2]. Then one technology member placed third Himax Technologies, Inc. [3].

In mid-pack, four basic materials representatives placed fourth through sixth and ninth, Loma Negra Compañía Industrial Argentina Sociedad Anónima ( LOMA ) [4], BHP Group Limited ( BHP ) [5], Rio Tinto Group [6], and Ternium S.A. [9].

Then a lone financial services member placed seventh, FS KKR Capital Corp ( FSK ) [7].

Finally, one consumer cyclical representative placed tenth, Big 5 Sporting Goods Corporation ( BGFV ) [10], to complete this Graham Formula top ten, by yield, for August.

Actionable Conclusions: (21-30) Ten Graham Value Dividend Stocks Showed 14.61% To 60% Upsides To August 2023, With (31) Three -1.38% To -5.04% 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 15.53% Disadvantage For 5 Highest Yield, Lowest Priced of Top-Ten Graham Value Formula Dogs To August 2023

Ten top Graham Formula stocks were culled by yield for this monthly update. Those (dividend/price) results verified by YCharts did the ranking.

As noted above, top-ten Graham Formula Dogs selected 8/9/22, showing the highest dividend yields, represented six of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Graham Formula Dividend Stocks (33) Delivering 24.67% Vs. (34) 29.2% Net Gains by All Ten by August 2023

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Graham Formula dividend pack by yield were predicted by analyst 1-year targets to deliver 15.53% LESS gain than $5,000 invested as $.5k in all ten. The seventh lowest-priced Graham top-yield stock, Ternium S.A., was projected to deliver the best net gain of 67.06%.

The five lowest-priced top-yield Graham Formula dividend stocks for August 19 were: Loma Negra Compañía Industrial Argentina Sociedad Anónima, Himax Technologies Inc, Via Renewables Inc, Embotelladora Andina SA, and Big 5 Sporting Goods Corporation, with prices ranging from $6.66 to $12.69.

The five higher-priced top-yield Graham Formula dividend stocks for August 19 were: FS KKR Capital Corp, Ternium S.A., Kenon Holdings Ltd., BHP Group Limited, and Rio Tinto Group, whose prices ranged from $21.92 to $58.83.

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 twenty-five stocks ripe for picking at the start of the article, here is a repeat of the list at the end:

In the current market bounce, dividends from $1K invested in the twenty-five stocks listed above met or exceeded their single share prices as of 8/19/22.

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

Recent vs Break-Even Top Ten Graham Formula Stock Prices

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

You could look at the bottom chart as an indicator of how high each stock might rise in the coming year or two. However, it also shows how much the price must rise (in either dollars or percentage) before it no longer conforms the standard of dividends from $1K invested exceeding the current single share price.

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 Graham Value Dividend 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. Dog silhouette: Open source dog art from dividenddogcatcher.com

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