E - 43 May 2023 Ideal Dividend Large-Cap High-Yield Stocks

2023-05-09 15:14:21 ET

Summary

• Dogsofthedow.com published this May list of 50 Large Cap High Dividend stocks 5/5/23.
• Dogsofthedow.com published this list for investors who “don’t want to simply focus on high dividend yield only to discover the stock price plunging or the corporation has gone belly-up."
• Investors may reduce this volatility/risk by limiting their search to large-well-established companies. For example, net-gain-estimates for FANG, DVN, CFG, CHK, ET, BBVA, BTI, STLA, EC, & topped-by PBR ranged 35.96%-92.13%.
• Ten top 2023 Large Cap High Yield Stock dividend yields ranged 9.12% to 59.49% from MPLX; E; BCH; ET; DVN; CHK; PXD; IEP; EC; PBR.
• $5k invested May 5 in the top five high-yield, lowest-priced, 2023 Large Cap Stocks showed 22.52% more net-gain than from $5k invested all top ten. Little (lower-priced) equities led the top-ten May 2023 High Yield Large Cap dividend dogs by two and one-quarter lengths.

Foreword

This article is based on recent May 5 published list of High Yield Large Cap stocks by DogsOfTheDow.com entitled,

Highest Dividend Paying Large-Cap Stocks .

Yields for these top big dog 50 were also greater than 3.8%.

“The advantage of focusing on large-cap stocks is that these companies tend to be less volatile and also tend to have more resources (e.g. strong management, access to credit, etc.) to maintain their dividend payments over the long-term.”

—Dogs of the Dow.

Any collection of stocks is more clearly understood when subjected to this yield-based (dog catcher) analysis, these High Dividend Paying Large Cap stocks are perfect for the dogcatcher process. Here is May 5 data for 50 dividend paying stocks including the 43 living up to the dogcatcher "ideal" in this one-source collection.

The Ides of March 2020 plunge in the stock market took its toll on stocks over three years ago. However, sudden recovery in prices after the plunge by these fifty dividend stocks made the possibility of owning productive dividend shares from this collection more remote for first-time investors.

May, 2023 shows a glimmer of light from forty-three stocks emerging as dogcatcher ideal candidates. They are:

Actionable Conclusions (1-10): Brokers Estimated Top-Ten 2 023 Highest Dividend Paying Large Cap Stocks Might Net 35.96% to 92.13% Gains By May 2024

Five of the tops-by-yield Highest Dividend Paying Large Cap 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 50% 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 2023-24 data points. However, one year target-prices by lone analysts were not counted. The resulting ten probable best profit-generating Highest Dividend Paying Large Cap Stocks projected to May 5, 2024, by that reckoning, were:

Petroleo Brasileiro S.A. Petrobras ( PBR ) netted $921.31 based on the median of target prices estimated by 16 analysts, plus estimated dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 37% greater than the market as a whole.

Ecopetrol S.A. ( EC ) netted $795.45 based on dividends plus a median target price estimate from 12 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 46% greater than the market as a whole.

Stellantis N.V. ( STLA ) netted $577.43 based on estimates from 6 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 53% greater than the market as a whole.

British American Tobacco p.l.c ( BTI ) netted $506.90 based on the median of target estimates from 3 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 45% less than the market as a whole.

Banco Bilbao Vizcaya Argentaria, S.A. ( BBVA ) netted $475.67 based on the median of target estimates from 2 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% greater than the market as a whole.

Energy Transfer LP ( ET ) netted $473.00 based on the median of target price estimates from 16 analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 74% greater than the market as a whole.

Chesapeake Energy Corp ( CHK ) net $453.00 based on the median of target estimates from 19 analysts, less broker fees. A Beta number was not available for CHK.

Citizens Financial Group, Inc. ( CFG ) netted $433.98 based on estimates from 19 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 32% greater than the market as a whole.

Devon Energy Corp ( DVN ) netted $401.06 based on the median of target estimates from 28 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 134% greater than the market as a whole.

Diamondback Energy, Inc. ( FANG ) netted $359.60 based on the median of target estimates from 29 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 104% greater than the market as a whole.

The average net-gain in dividend and price was 53.97% on $10k invested as $1k in each of these ten Highest Dividend Paying Large Cap Stocks. This gain estimate was subject to average risk/volatility 51% 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 50 Highest Dividend Paying Large Cap 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 50 Highest Dividend Paying Large Cap Stock Picks By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The May Dogs of The Highest Dividend Paying Large Cap Stocks

Top ten Highest Dividend Paying Large Cap Stocks selected 5/5/23 by yield represented just two of eleven Morningstar sectors.

First place was secured by the first of nine energy concerns, Petroleo Brasileiro S.A. Petrobras [1]. The others placed send through seventh, ninth and tenth, Ecopetrol S.A. [2]; Icahn Enterprises L.P. ( IEP ) [3]; Pioneer Natural Resources Co ( PXD ) [4]; Chesapeake Energy Corp [5]; Devon Energy Corp [6]; Energy Transfer LP [7]; Eni S.p.A ( E ) [9]; MPLX LP ( MPLX ) [10].

Finally, eighth place was taken by the lone financial services representative in the top ten, Banco de Chile ( BCH ) [8], to complete the top ten Dogs of the Highest Dividend Paying Large Cap Stocks for May.

Actionable Conclusions: (21-30) Ten Highest Dividend Paying Large Cap Stocks Showed 31.06% to 49.69% Upsides To May, 2024, With (31) One -1.18% Loser

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 22.52% Advantage For 5 Highest Yield, Lowest Priced of Top-Ten Highest Dividend Paying Large Cap Stocks To May, 2023

Ten top Highest Dividend Paying Large Cap Stocks were culled by yield for this monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top-ten Highest Dividend Paying Large Cap Stocks selected 5/5/23, showing the highest dividend yields, represented two of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Dividend Paying Large Cap Stocks (33) Delivering 49.68% Vs. (34) 40.55% Net Gains by All Ten by May, 2024

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Highest Dividend Paying Large Cap Stocks by yield were predicted by analyst 1-year targets to deliver 22.52% more gain than $5,000 invested as $.5k in all ten. The second lowest-priced Highest Dividend Paying Large Cap top-yield stock, Petrol Brasileiro SA Petrobras, was projected to deliver the best net gain of 92.13%.

The five lowest-priced top-yield Highest Dividend Paying Large Cap stocks for May 5 were: Ecopetrol S.A.; Petrol Brasileiro S.A. Petrobras; Energy Transfer LP; Banco de Chile; Eni S.p.A, with prices ranging from $9.20 to $30.01

The five higher-priced top-yield Highest Dividend Paying Large Cap stocks for May 5 were: MPLX LP; Icahn Enterprises LP; Devon Energy Corp; Chesapeake Energy Corp; Pioneer Natural Resources Co, whose prices ranged from $33.99 to $212.22.

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 15% to 85% 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 forty-three 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 forty-three stocks listed above met or exceeded their single share prices as of 5/5/23.

As we are over three years past the 2020 Ides of March dip, the time to snap up some those forty-three top yield Highest Dividend Paying Large Cap stocks 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 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 May 16 in the SA Marketplace.

Recent vs Fair Top Ten Highest Dividend Paying Large Cap Stock Prices

Since nine of the top-ten Highest Dividend Paying Large Cap Stock shares are priced less than the annual dividends paid out from a $1K investment, the following top chart shows the dollar and percentage shift required for the lone dog at recent prices to create break-even pricing for 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 revealed in the bottom chart.

The top chart is an indicator of how low the six 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.

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 2022 Closer dog stock purchase or sale research process. These were not recommendations.

For further details see: