STLA - 50 Large-Cap High-Yield Stocks For December

2023-11-29 12:16:53 ET

Summary

• Dogsofthedow.com, or DOD, recently published its list of 50 large-cap high-dividend stocks as of 11/27/23 per data from YCharts.
• The DOD list targeted-investors who “don’t want to simply focus on a high dividend yield only to discover that the stock price has plunged or that the corporation went belly-up.”.
• Investors reduce volatility/risk by limiting high-dividend search to large-well-established companies.
• The top ten December YCharted large-cap high-yield dividends ranged from 9.14% to 25.94% from ET; MPLX; MO; WBA; ARCC; BCH; VOD; VOD; PBR; ABR.A; EC.
• $5k invested on November 27 in the top-five high-yield, lowest-priced, large-cap stocks show 15.92% returns, more net gain than from $5k invested in all top ten. Little (lower-priced) equities led these top ten December high-yield large-cap dividend dogs by two and one-half lengths.

Foreword

This article is based on a November 27, 2023, list of high-yield large-cap stocks published by DogsOfTheDow.com entitled:

Highest Dividend Paying Large-Cap Stocks .

Yields for those top big dog 50 were all greater than 4.96% to close November. In late May, the minimum yield was at 4.49%; June bottomed out at 5.9%; in late August the bottom yield was 5.30%; September was no lower than 5.8%! The list changes daily at its source.

“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 large -cap stocks are perfect for the dogcatcher process. Below is November 27 data for 50 dividend paying stocks including 47 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 about three and three-quarter years ago. However, the 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.

December, 2023 shows a glimmer of light from forty-seven large-cap and high-yield stocks emerging as dogcatcher ideal candidates. They are:

Actionable Conclusions (1-10): Brokers Estimated Top-Ten December High-Dividend Large-Cap Stocks Might Net 14.93% to 59.12% Gains By 2024

Four of the top-yield high-dividend 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 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 2023-24 data points. (However, one year target-prices by lone analysts were not counted.) The resulting ten probable best profit-generating highest-dividend large-cap stocks projected to December, 2024, by that reckoning, were:

Vodafone Group PLC ( VOD ) netted $688.26 based on the median of target prices estimated by 4 analysts, plus estimated dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 24% less than the market as a whole.

Walgreens Boots Alliance ( WBA ) netted $438.06 based on the median of target estimates from 13 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% less than the market as a whole.

Stellantis NV ( STLA ) netted $414.22 based on estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 54% greater than the market as a whole.

British American Tobacco PLC ( BTI ) netted $391.68 based on the median of target estimates from 3 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 43% less than the market as a whole.

Energy Transfer LP ( ET ) netted $368.89 based on the median of target estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 66% greater than the market as a whole.

Petrol Brasileiro SA Petrobras ( PBR.A ) netted $344.86 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 59% greater than the market as a whole.

Telefonica SA ( TEF ) netted $297.02 based on the median of target estimates from 2 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 34% under the market as a whole.

Companhia Paranaense de Energia Copel ( ELP ) netted $293.73 based on the median of target prices estimated by 2 analysts, plus estimated dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility equal to the market as a whole.

KeyCorp ( KEY ) netted $292.90 based on the median of target estimates from 2 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% greater than the market as a whole.

Enterprise Products Partners ( EPD ) netted $252.18 based on the median of target price estimates from 21 analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 7% greater than the market as a whole.

The average net-gain in dividend and price was 37.82% on $10k invested as $1k in each of these ten high-dividend large-cap stocks. This gain estimate was subject to average risk/volatility 9% 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 High-Dividend Large-Cap December Stock Picks By Broker Targets

This list of broker-estimated upside (or downside) for stock prices provides a scale of market popularity. Note: no broker coverage or one 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 High-Dividend Large-Cap December Stock Picks By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The December Dogs of High-Dividend Large-Cap Collection

Top ten High-Dividend Large-Cap Stocks selected 11/27/23 by yield represented five of eleven Morningstar sectors.

First through third places were secured by the first three of five energy outfits in the top ten, Ecopetrol SA ( EC )[1] and Petroleo Brasleiro SA Petrobras ( PBR ) [2] [3]. The others placed ninth and tenth: MPLX LP ( MPLX ) [9]; Energy Transfer LP [10].

Fourth place went to the lone communication services member, Vodafone Group PLC [4].

Fifth and sixth places were captured by the two financial services representatives in the top ten, Banco de Chile ( BCH ) [5], and Ares Capital Corp ( ARCC ) [6].

Then a lone healthcare sector representative placed seventh, Walgreens Boots Alliance [7].

Finally, a consumer defensive sector member placed eighth, Altria Group ( MO ) [8] to complete the top ten Dogs of the high-dividend large-cap collection for December.

Actionable Conclusions: (21-30) Ten High-Dividend Large-Cap Stocks Showed 14.93% to 59.12% Upsides To December, 2024, With (31) Three -3.06% to -13.82% 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 25.92% Advantage For 5 Highest Yield, Lowest Priced of Top-Ten High-Dividend Large-Cap Stocks To December, 2023

Ten top high-dividend 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 high-dividend large-cap stocks selected 11/27/23, showing the highest dividend yields, represented five of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Ten High-Yield Large-Cap Stocks (33) Delivering 38.4% Vs. (34) 30.49% Net Gains by All Ten by December 2024

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten high-dividend large-cap stocks by yield were predicted by analyst 1-year targets to deliver 25.92% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced high-dividend large-cap top-yield stock, Vodafone Group PLC, was projected to deliver the best net gain of 68.83%.

The five lowest-priced top-yield high-dividend large cap stocks for November 27 were: Vodafone Group PLC; Ecopetrol SA; Energy Transfer LP; Petrol Brasileiro SA Petrobras (2) with prices ranging from $9.05 to $15.24

Five higher-priced top-yield high-dividend large cap stocks for November 27 were: Ares Capital Corp; Walgreens Boots Alliance; Banco De Chile; MPLX LP; Altria Group Inc, whose prices ranged from $19.85 to $41.44.

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-four 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-six stocks listed above met or exceeded their single share prices as of 11/27/23.

As we are over three and one half years past the 2020 Ides of March dip, the time to snap up some those forty-seven top yield high-dividend 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 December 7 under the SA Investing Groups tab.

Recent vs Break-Even Top Ten High-Dividend Large-Cap Stock Prices

Since all ten of the top-ten high- dividend large-cap stocks are priced less than the annual dividends paid out from a $1K investment, the following top chart shows the dollar and percentage shift required 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 break-even prices are revealed in the bottom chart.

The top chart is an indicator of how high the ideal stocks must arise to become equally-priced. Which means barely 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 2023 top-yield high-dividend large cap stock purchase or sale research process. These were not recommendations.

For further details see: