CDUAF - March Dividend Kings: 5 Buys 4 To Watch

Summary

• "There is only one-criterion to be included among the Dividend Kings: a publicly-traded company must increase its total fiscal-year dividend-payout for a minimum of 50 consecutive years."--Dogs of the Dow.
• The 47 Dividend Kings screened as of February 24, 2023, represented eight of eleven Morningstar Sectors. Broker targeted-top-ten net-gainers ranged 15.54%-31.75% topped-by NFG & VFC.
• By yield, MO tops all. Top-ten Kingly February yields from ABBV, BKH, FRT, NWN, VFC, CDUAF, LEG, MMM, UVV, & MO averaged 5.09%.
• Kings with top ten broker-estimated target-price upsides, ABM, TNC, FUL, ABT, MSA, NFG, EMR, VFC, SCL, and GRC, averaged 24.55%.
• $5k invested February 24 in the five top-yield, lowest-priced Kings showed 4.82% more net-gain than from $5k invested in all top ten. Little (lower-priced) equities led these Dividend Kings by almost half a length.

Foreword

As supplement to this article, please note that Dogs of the Dow has published a 2023 list detailing the latest 47 Dividend Kings. The article, entitled 2023 Dividend Kings List , is on-line now.

While most of this collection of 47 Kings is too pricey to justify their skinny dividends, five of the top-ten, by yield, live up to the ideal of offering annual dividends (from a $1K investment) exceeding their single share prices, and this month there are four more to watch,

In the current market adjustment, it is now possible for Altria Group Inc ( MO ), Universal Corp ( UVV ), Leggett & Platt Inc ( LEG ), Canadian Utilities Ltd ( CDUAF ), and V.F. Corp ( VFC ) to stay fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices.

The four to watch are Northwest Natural Holding Co ( NWN ), Black Hills Corp ( BKH ), 3M Company ( MMM ), and Federal Realty Investment Trust ( FRT ). NWN needs to drop just $3.52 in price or 7.4%; BKH can shed $12.70 in price; MMM is $30.32 overweight, and FRT needs to lose $42.27 to join the ideal five.

As we near the three-year marks of the 2020 Ides of March dip, the time to snap-up those five lingering top yield dividend King dogs is at hand... unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your position in any of those you then hold.)

Actionable Conclusions (1-10): Analysts Predict 15.54% To 31.75.% Top-Ten King Net Gains To March 2024

Three of the ten top Kings by yield were verified as 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 February 24 forecast for Kings (as graded by Brokers) was 30% accurate.

Estimated dividend returns from $1000 invested in each of these highest-yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, produced the 2023-24 data points for the projections below. (Note: target prices from lone-analysts were not used.) Ten probable profit-generating trades projected to March, 2024 were:

V.F. Corp was projected to net $317.52 based on dividends, plus the median of target price estimates from 21 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% more than the market as a whole.

National Fuel Gas Co ( NFG ) was projected to net $255.56, 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 31% less than the market as a whole.

Emerson Electric Co ( EMR ) netted $254.04 based on a median target price estimate from 20 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% more than the market as a whole.

Abbott Laboratories ( ABT ) was projected to net $214.76, based on a median of target estimates from 21 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 33% less than the market as a whole.

3M Company was projected to net $199.97, based on the median of target price estimates from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 50% greater than the market as a whole.

Northwest Natural Holding Co was projected to net $184.65, based on the median of target price estimates from 7 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 42% less than the market as a whole.

Johnson & Johnson ( JNJ ) was projected to net $182.69 based on target price estimates from 19 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate is subject to risk/volatility 46% less than the market as a whole.

Lowe's Companies Inc ( LOW ) was projected to net $175.33, based on the median of target price estimates from 29 analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 13% more than the market as a whole.

Sysco Corp ( SYY ) was projected to net $164.42, based on dividends, plus the median of target price estimates from 14 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% greater than the market as a whole.

The Coca-Cola Company ( KO ) was projected to net $155.39, based on dividends, plus the median of target price estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 45% less than the market as a whole.

The average net gain in dividend and price was estimated to be 21.04% on $10k invested as $1k in each of these ten stocks. The average Beta ranking showed these estimates subject to risk/volatility 4% less 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," even if they are "Kings" and "Princes."

Top 47 Dividend Kings By Broker Targets

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

Top 47 Dividend Kings By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The March Dogs Of Kings

Top ten Kings selected 2/24/23 by yield represented six of eleven Morningstar sectors. In first place was Altria Group Inc. [1], the tops of two consumer defensive representatives listed. The other placed second, Universal Corp [2].

Then, the lone industrials sector representative placed third, 3M Co [3]. The first of two consumer cyclical representatives took fourth place, Leggett & Platt Inc [4]. The other placed sixth, V.F. Corp.

In fifth place, was the first of three utilities , Canadian Utilities Ltd [5]. Thereafter, in seventh was, Northwest Natural Holding Co [7], followed by Black Hills Corp [9].

Eighth place was claimed by the lone real estate representative, Federal Realty Investment Trust [8].

Finally, to complete these March top-ten Kings, by yield, a lone healthcare representative placed tenth, AbbVie Inc ( ABBV ) [10].

Actionable Conclusions: (21-30) Top Ten Kings Showed 13.47% To 27.79% Upsides Into March 2023; (31) On The Downside Were Three -1.03% To -7.69% 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 4.82% Advantage For 5 Highest Yield, Lowest Priced, of Top-Ten Dividend Kings To March, 2024

Ten top Kings were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top ten Kings selected 2/24/23 showing the highest dividend yields represented six of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Dividend Kings (32) Delivering 12.66% Vs. (33) 12.06% Net Gains by All Ten by March 2024

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Kings kennel by yield were predicted by analyst 1-year targets to deliver 4.82% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced Kings top-yield stock, V.F. Corp, was projected to deliver the best net gain of 31.75%.

The five lowest-priced top-yield Dividend Kings as of February 24 were: V.F. Corp; Canadian Utilities Ltd; Leggett & Platt Inc; Altria Group Inc; Northwest Natural Holding Co, with prices ranging from $24.18 to $47.58

The five higher-priced top-yield Dividend Kings and Princes for February 24 were: Universal Corp; Black Hills Corp; Federal Realty Investment Trust; 3M Co; AbbVie Inc, whose prices ranged from $51.19 to $152.71.

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, however, 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.

Afterword

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

The following 5 (as of 2/24/23) realized the ideal of offering annual dividends from a $1K investment exceeding their single share prices: Altria Group Inc, Universal Corp, Leggett & Platt Inc, Canadian Utilities Ltd, and V.F. Corp. Four more bear watching, NWN needs to drop just $3.52 in price or 7.4%; BKH can shed $12.70 in price; MMM is $30.32 overweight, and FRT needs to lose $42.27 to join the ideal five.

Price Drops or Dividend Increases Could Get All Ten Top Dividend Kings Back to "Fair Price" Rates For Investors

Since five of the top ten Dividend K&P shares are now priced less than the annual dividends paid out from a $1K investment, the top chart below shows the dollar and percentage differences between recent and fair prices. Note that NWN was just $5.18 over the mark. All others are within $32 to $72 of being there. The middle chart compares the five ideals with five at recent prices. Fair pricing (when all ten top dogs conform to the ideal) is displayed in the bottom chart.

March Dividend Kings Alphabetical by Ticker Symbol

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 Dividend Aristocrats dog stock purchase or sale research process. These were not recommendations.

For further details see: