PM - 9 February Inflation-Busting Ideal Dividend Dogs
Summary
- March-April, 2022, UBS, Kiplinger, and Barron's analysts and reporters combined to list five sets of stocks sorted as: “Inflation Busters.” Those five articles revealed 48 equities, with 43 paying-dividends.
- Article-titles were, ’24 Pricing Power Performers’ [UBS]; ‘7 REITS Raising-Dividends’ [KIP]…; '10 Stocks for Rising Interest-Rates’ [KIP]…; ‘5 Stocks to Stave-off Sizzling Inflation”[KIP]…; ‘6 Dividend Stocks Whip Inflation…[Barron’s].’.
- Come February, 2023, those 48 top-inflation busting-stocks ranged 0.07% to 10.75% in annual-yield and ranged -20.03% to 39.12% in one-year price-target-upsides per brokers 2/16/23-24.
- Top-ten Inflation Busting Dividend stocks boasted net gains from 14.46% to 45.62% per YCharts forward-looking data 2/16/23.
- $5k invested in the February lowest-priced five of ten top-yield Inflation Busters showed 8.8% more net-gain than from $5k invested in all ten. Little (lower-priced) stocks lead by over three quarter lengths on this ‘inflation busting’ pack this month.
Foreword
This article is based on five UBS, Kiplinger, and Barron's articles, aimed at finding “Inflation Busting,” stocks since 2022. The author believes these stock suggestions are prescient into the new year 2023. The title and links to the articles follow:
"With inflation pressures surging, pricing power relative to cost exposures will be a key theme and source of [absolute outperformance] for global equity markets," writes the UBS Equity Strategy team.—by: Dan Burrows April 14, 2022
REIT dividends are expected to post double-digit percentage growth this year, making the yield-friendly sector all the more attractive.—by: Lisa Springer April 13, 2022
10 Stocks for Rising Interest Rates
The Federal Reserve has signaled in no uncertain terms that interest rates will head higher in 2022. Here are 10 of the best stocks for this environment. —by: Jeff Reeves April 4, 2022
5 Stocks To Stave Off Sizzling inflation
Income investors like utility stocks for their stability and generous dividends. Here are 12 top-rated ones to watch in the new year. —by: Dan Burrows February 10, 2022
6 Dividend Stocks Whip Inflation
The hot new investment theme isn’t socially nuanced crypto space finance or metaverse charging networks for virtual vehicles. It’s dividends—cash payments to shareholders.
To find more dividend growers, Barron’s used an approach inspired by the Federal Reserve’s so-called dot plot, or path of expected interest rate hikes . They screened the S&P 500 for companies that analysts predict will increase payments nicely in the years ahead. The came up with six. —By Jack Hough Updated April 24, 2022 / Original April 22, 2022
Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this collection of UBS, Kiplinger, and Barron's articles, aimed at finding the “Inflation Busting,” stocks is perfect for the dogcatcher process. Below are the February 16, 2023 “Inflation-Busters” as parsed by YCharts.
The prices of 9 of these 48 UBS, Kiplinger, and Barron's dividend selections, made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
Those 9 Dogcatcher Ideal “Inflation Busting” stocks for February are: Arbor Realty Trust Inc ( ABR ); Ares Capital Corp ( ARCC ); BHP Group Ltd ( BHP ); British American Tobacco PLC ( BTI ); Alliance Bernstein Holding ( AB ); VICI Properties Inc ( VICI ); PacWest Bancorp ( PACW ); HP Inc ( HPQ ); and Navient Corp ( NAVI ).
Those nine all live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as "look closer to maybe buy" opportunity.
Which of the 9 are "safer" dividend dogs? To find the answer find my "Safer" February Dividend Dogcatcher follow-up detailing these UBS, Kiplinger, and Barron's “Inflation Busting,” stocks in Seeking Alpha’s Marketplace appearing on or about February 23. Simply click on the link in the last Summary bullet point above.
Actionable Conclusions (1-10): Analysts Estimated 14.46% To 45.62% Net Gains For Ten Top " Inflation-Busting" Dividend Stocks To February, 2024
Four of ten top “Inflation Buster” dividend stocks by yield were also 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, the yield-based forecast for these January dogs was graded by Wall St. Wizards as 40% accurate.
Estimated dividends from $1000 invested in each of the highest yielding ”Inflation Buster” stocks, added to the median of aggregate one-year target prices from analysts (as reported by YCharts), generated the following results. Note: one-year target prices by lone analysts were not included. Ten probable profit-generating trades projected to February, 2024 were:
British American Tobacco was projected to net $456.17 based on dividends, plus the median of target estimates from 3 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 41% less than the market as a whole.
CVS Health Corp ( CVS ) was projected to net $339.72 based on the median of target price estimates from 22 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 33% less than the market as a whole.
Hasbro Inc ( HAS ) was projected to net $300.30, based on dividends, plus the median of target price estimates from 13 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 30% less than the market as a whole.
Conoco Phillips ( COP ) was projected to net $259.09, based on dividends, plus the median of target price estimates from 26 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% over the market as a whole.
Pfizer Inc ( PFE ) was projected to net $221.68, based on dividends, plus the median of target price estimates from 22 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 37% less than the market as a whole.
American Tower Corp ( AMT ) was projected to net $199.94, based on the median of estimates from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 45% less than the market as a whole.
Arbor Realty Trust Inc was projected to net $198.91, based on the median of target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 95% greater than the market as a whole.
The AES Corp ( AES ) was projected to net $179.40, based on the median of target estimates from 12 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% less than the market as a whole.
Astra Zeneca PLC ( AZN ) was projected to net $159.20, based on dividends, plus the median of target price estimates from 8 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 49% under the market as a whole.
Mondelez International Inc ( MDLZ ) was projected to net $144.64, based on dividends, plus median target price estimates from 24 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 35% under the market as a whole.
The average net gain in dividend and price was estimated at 24.59% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 15% under 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."
48 Inflation Busters For 2023-24 Per February Analyst Target Data
48 Inflation Busters 2023-24 Dividends By February Yields
Actionable Conclusions (11-20): Ten Top Inflation Busters By Yield For 2023-24
Top ten 2023-24 “Inflation Busting” stocks by yield in February represented six of eleven Morningstar sectors. First place went to the first of three real estate sector representatives, Arbor Realty Trust Inc [1]. The others placed eighth, and tenth, VICI Properties Inc [8], and Extra Space Storage Inc ( EXR ) [10].
Positions two, and five were claimed by financial services sector members: Ares Capital Corp [2]; Alliance Bernstein Holding LP [5].
Third place was claimed by the single basic materials rep in the top ten, BHP Group Ltd [3].
Two consumer defensive stocks took the fourth and sixth slots on this list, British America Tobacco PLC [4], and Phillip Morris International Inc ( PM ) [6].
Then. a lone consumer cyclical member placed seventh, Hasbro Inc [7]. Finally, a lone healthcare member placed ninth, Pfizer Inc [9}, to complete the top ten “Inflation Busters” for 2023-24 dividend pack as of February 16.
Actionable Conclusions: (21-30) Ten Top “Inflation-Buster” Dividend Payer s For 2023-24 Showed 12.10%-39.18% Upsides While (31) Four Down-siders Tumbled In February
To quantify top dog rankings, analyst median price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, median analyst target price estimates became another tool to dig out bargains.
Analysts Forecast A 8.8% Advantage For 5 Highest Yield, Lowest Priced, of 10 Inflation-Busting Stocks for February 2023-24
Ten top UBS, Kiplinger, and Barron's dividend selections, aimed at finding the “Inflation Busters” for 2023-24 were culled by yield for this update. Yield (dividend / price) results provided by YCharts did the ranking.
As noted above, top ten UBS, Kiplinger, and Barron's dividend selections, aimed at finding the best Inflation Buster stocks, as screened 2/16/23, showing the highest dividend yields, represented six of eleven in the Morningstar sector scheme.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Inflation-Buster Dividend Stocks for 2023-24 (32) Delivering 20.7% Vs. (33) 19.02% Net Gains by All Ten Come February, 2024
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten UBS, Kiplinger, and Barron's dividend selections, aimed at finding the “Inflation Busters” for 2022-23 by yield, were predicted, by analyst 1-year targets, to deliver 28.71% more gain than $5,000 invested as $.5k in all ten. The fourth lowest-priced selection, British American Tobacco PLC, was projected to deliver the best net gain of 45.62%.
The five lowest-priced top-yield UBS, Kiplinger, and Barron's dividend selections, aimed at finding the “Inflation Busters” as of February 16 were: Arbor Realty Trust Inc; Ares Capital Corp; VICI Properties Inc; British American Tobacco PLC; AllianceBernstein Holding LP, with prices ranging from $14.89 to $40.85.
Five higher-priced UBS, Kiplinger, and Barron's dividend selections, aimed at finding “Inflation Busters” as of December 12 were: Pfizer Inc; Hasbro Inc; BHP Group Ltd; Phillip Morris International Inc; Extra Space Storage Inc, whose prices ranged from $42.95 to $158.84.
The 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 85% accurate on the direction of change and just 0% to 15% accurate on the degree of change.
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.
Afterword
This article features 48 UBS, Kiplinger, and Barron's “Inflation Buster“ selections for 2022-23. The article focuses on the top 30, or so, dividend payers. Thus, nearly one-third of the original list of companies is neglected. Therefore, below is the complete list of 48 stocks grouped by source.
Sources: Kiplinger.com, Barrons.com, YCharts.com
If somehow you missed the suggestion of which stocks are ripe for picking at the start of this article, here is a reprise of the list at the end:
The prices of 9 of these 48 Kiplinger, and Barron's dividend selections, as “Inflation Buster,” stocks for 2023-24 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
Those 10 Dogcatcher ideal “inflation Busting” dividend stocks for February are:
Those nine all live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as "look closer to maybe buy" opportunity.
Which of the 9 are 'safer' dividend dogs? To find the answer find my 'Safer’ December Dividend Dogcatcher follow-up detailing these Kiplinger, and Barron's Inflation Busting, stocks for 2023 in the Seeking Alpha Marketplace appearing on or about February 26. Simply click on the link in last Summary bullet point at the top of this article.
How All Ten Top “Inflation Buster” 2023-24 Stocks Could Become Ideal Fair Priced Dogs
Since six of the top ten Kiplinger, and Barron's “Inflation Buster”, stocks for 2023 shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those six plus four at recent prices.
The dollar and percentage differences between recent and fair prices are detailed in the top chart. The recent prices are shown in the middle chart with the fair pricing of all ten top dogs conforming to the dogcatcher ideal are detailed in the bottom chart.
With renewed downside market pressure to 51.22%, it is possible for all ten highest-yield UBS, Kiplinger & Barron's Inflation Busting Dividend stocks, to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a nice head-start with six of ten already fair priced.
Stocks listed above were suggested only as possible reference points for your purchase or sale research process. These were not recommendations.
For further details see:
9 February Inflation-Busting Ideal Dividend Dogs