KEN - Readers Revealed 26 Ideal January Dividend Dogs

Summary

• Prior to January 31, 2023 readers mentioned 33 equities in recent comments on Arnold articles. Some bad-news investments (rogues) mixed with (mostly) favorites. Thus, these are ReFa/Ro.
• Ten analyst-target-estimated TOP-NET-GAIN Re/Fa/Ro: ABR, EFC, ORAN, SQM, FSK, VFC, GNK, BTI, PBR, & ZIM, averaged 37.85% net gains from data collected 2/14/23.
• TOP-PRICE-UPSIDE reader faves & rogues (ReFa/Ro) were: ARCC, EFC, ABR, VICI, ORAN, SQM, PBR, GNK, VFC, and BTI boasting a 19.65% average target price upside estimate.
• By YIELD, the following ReFa/Ro made the top ten: PDI; FSK; EFC; OXLC; ECC; GNK; TRIN; KEN; PBR; ZIM. They averaged 34.44% annual yield. (Three stocks made all three lists this month: PBR; GNK; EFC).
• $5k invested in the lowest-priced five of these top-yield ReFa/Ro dividend dogs showed 20.44% LESS net-gain than from $5k invested in all ten. The big (higher-priced) ReFa/Ro dogs continued to lead this pack in January.

Reader Selections

Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a reader favorite listing in this series of articles. Thus, It is possible that only rogues and discontinued, or dreadful, doubtful, dividend issues may appear.

Lately readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however, praise the effort to sort promising opportunities out of the thousands of dividend offers. After all, yield counts when searching for dividend winners.

Furthermore, my dog catching is, by method, a contrarian investing strategy and that can rub some investors the wrong way. It is most useful for new buyers; intended to guide readers to new purchases of dogs on the dips.

Most valuable to the writer, however, are those reader comments that truly catch errors in my calculations or changes in direction. Examples like the reader who missed my "safer" dividend follow-up articles because they contain dividend payout ratios.

There are also those who catch flagrant fouled stock lists not synchronized with the data charted. In January a reader discovered a 'Safer' net gain chart posing as a Monthly Pay chart that even Seeking Alpha Editors missed. In February the pending demise of my four S&P 500 Aristocrat buy suggestions caught reader attention.

Every month some discover errant ticker symbols. Last month a reader noted SSSS hadn’t paid a Q Dividend since April. And earlier this year, a reader asked how to identify Rogues in the ReFa/Ro list. The top ten are now so identified.

In June high yields were alleged, by one reader, to be sure signs of Rogueishness. Not true, high yields are sure signs of high yield, how long the elevated yield lasts, depends share price and corporate directors. High Beta is the most accurate measure of Rogueishness.

Reader suggestions of buy and hold dividend stocks are most welcome and sure to be reported on my ReFa/Ro posts. That’s my ultimate goal, of course, to find ten or twenty sure-fire long-term dividend payers purchased when their single share prices are lower than the dividend paid from

$1K invested. Suggestions, please! We’re trying to predict the future here, Kings and Aristocrats might hold up but may be too old and feeble to last.

In February one reader suggested an option strategy for monthly-paying dividend stocks:

"You should identify where options are available on the Monthly dividend stocks. What I do is find MoPay stocks with options, I buy and write covered calls about 6 - 12 months out. I look for a scenario where I collect the dividend and get my stock bought back at a much lower price than I pay, but pocket a premium that makes up the loss. This gives me a dividend boost, since my cost is lower. It's like a guaranteed CD with little risk."

Another reader suggested I dial-back my blatant opinion that high-yield equates to high-risk:

"The article says "high dividends are a sure sign of high risk".

It should be "high dividends might be a sign of high risk".

"If a good stock/ETF/CEF with a 5% dividend drops simply because the whole market dropped, the dividend could get to 8 or 9%. I think that's a great time to buy because the high dividend and low price makes it a low risk investment."

More than one writer has decried my favoritism for low-priced stocks. They especially dislike my "ideal" stocks whose dividend returns from a $1k investment equaling or exceeding share price. A prime example is Sirius XM Holdings Inc ( SIRI ), the satellite radio and pandora music catalog owner, priced now at $4.61 easily passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 2.08%! A little over $1k investment now buys 217 shares. and they'll throw the owner a return (from $1k invested) over 4.5 times the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 48 years (and that assumes the satellite radio and subscription music service can survive that long)!

In August a reader said a $15.40 dividend on a $1K investment was too small. I point out that holders of AAPL stock now garner about $7.00 in dividends from $1K invested.

This month the following exchange occurred:

Sorry, but I'm confused. Why does it matter if a stock is $1000 per share and pays a $50 dividend, or $20 per share and pays a $1 dividend. Isn't that the same 5% yield?

But if I'm following your logic, you would like the latter because the total dividend from $1,000 invested is more than the individual share price, but you wouldn't like the former because it isn't.

Am I missing something?

You're right. Both the $1000 stock paying a $50 dividend and the $20 stock paying a $1.00 dividend cost $20 per dollar of dividend. Thus, neither is preferable because you've still spent $1000 to get $50 in dividends. The difference is entirely in the share count. One share versus 50. Which would you prefer to own?

Every month readers grumble that they can’t find my seven previous Dog of the week portfolios in my Dividend Dogcatcher service on the SA Marketplace site. This year SA has listed all the postings on my Dogcatcher service by date. So to find the summary and reference guide to each portfolio look at:

August 22, 2015 for I

October 13, 2016 for II

September 12, 2017 for III

September 13, 2018 for IV (Ivy)

September 8, 2019 for V (Volio)

September 12, 2020 for VI (Vista)

October 10, 2021 for VII (Viital)

October 8, 2022 for VIII (Viking).

Incidentally, the VIII portfolio of Dividend Dogs for each week (Viking) launched, on October 3 2022. The Viking SA Marketplace reports have been gathering since November 4.

Foreword

Note that this month readers mentioned 26 stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:

The ReFa/Ro January Ideal Dividend Dogs

Above are the 26 ideal candidates derived from the 33 tangible results from reader favorite & rogue equities received prior to January 31, 2023. YCharts data for this article was collected as of 2/14/23.

Actionable Conclusions (1-10): Brokers Estimated 19.08% To 120.5% Net Gains From 10 ReFa/Ro Stocks To January 2024

Five reader-favorite top-yield stocks were verified as being among the top 10 gainers for the coming year based on analyst one-year target-prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for reader-fave stocks, as graded by Wall St. wizards, was deemed 50% accurate.

Estimated dividend returns from $1k invested in each of the highest yielding stocks, plus the median one-year analyst target prices, as reported by YCharts, created the 2023-24 data points which identified probable profit-generating trades. (Note: one-year target prices by lone analysts were not counted.) Thus, ten probable profit-generating trades projected to February 14, 2024 were:

ZIM Integrated Shipping Services ( ZIM ) netted $1205.09 based on the median of target price estimates from 7 analysts, plus dividends, less broker fees. A Beta number was not available. ZIM is Rogue, watch out for falling dividends!

British American Tobacco PLC ( BTI ) was projected to net $447.22, based on the median of target estimates from 3 analysts, plus annual dividend, less broker fees. The Beta number shows this estimate subject to risk/volatility 41% under the market. BTI is a fave.

Petroleo Brasileiro SA Petrobras ( PBR ) was projected to net $907.26, 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 35% over the market as a whole. It's a Rogue.

Genco Shipping & Trading Inc ( GNK ) netted $425.98 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 8% over the market as a whole. It’s somewhat a rogue.

V.F. Corp ( VFC ) was projected to net $398.21, 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 44% over the market as a whole. VFC is rogue.

FS KKR Capital Corp ( FSK ) was projected to net $291.70, based on the median of target price estimates from 8 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% over the market as a whole. It's rogue.

Sociedad Quimica y Minera De Chile ( SQM ) was projected to net $267.18, 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 2% under the market as a whole. This is a fave.

Orange S.A. ( ORAN ) was projected to net $215.69, based on the median of target price estimates from 2 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 76% under the market as a whole. A fave.

Ellington Financial Inc ( EFC ) was projected to net $193.93 based on the median of target price estimates from 8 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 85% greater than the market as a whole. A Rogue.

Arbor Realty Trust Inc ( ABR ) was projected to net $190.83 based on the median of target price estimates from 5 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 95% over the market as a whole. A rogue.

Average net gain in dividend and price was estimated at 44.37% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 21% over the market as a whole. January, 2023, top-ten gainers counted seven rogues, and three faves.

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. So, the highest yielding stocks in any collection have become affectionately known as "dogs." More precisely, these are, in fact, best called, "underdogs."

33 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 2/14/22 for 33 equities and funds revealed the actionable conclusions discussed below.

See any Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book " Beating The Dow " (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analysts' price upside estimates expanded the stock universe to include popular growth equities, as desired.

33 ReFa/Ro By Target Gains

Actionable Conclusions (11-20): ReFa/Ro Top (Rogue), ZIM , Led 33 By Yield Through January

The 33 ReFa/Ro sorted by yield included 9 of 11 Morningstar sectors plus no exchange traded notes [ETNs], 2 exchange traded funds [ETFs], and 1 closed end investment company [CEIC], among the selections.

The ten top reader-mentions by yield in January, were led by the first of two Industrials representatives, ZIM Integrated Shipping Services Ltd [1]. The other industrial placed fifth, Genco Shipping & Trading Inc [5].

Second place went to the lone energy sector representative in the top ten, Petroleo Brasileiro SA. Thereafter, third place was occupied by the only utility herein, Kenon Holdings Ltd ( KEN ).

Five financial services sector representatives in the top ten, placed fourth, sixth, seventh, ninth and tenth: Trinity Capital Inc ( TRIN ) [4], Eagle Point Credit Co Inc ( ECC ) [6], Oxford Lane Capital Corp ( OXLC ) [7], FS KKR Capital Corp [9] and PIMCO Dynamic Income Fund ( PDI ) [10].

Finally, in eighth place, was the lone real estate representative in the top ten, Ellington Financial Inc [8], which completed the top 10 ReFa/Ro by yield as of February14, 2023.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 7.05% To 38.33% Increases To January, 2023.

To quantify top dog rankings, analysts' median price-target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analysts' median price-target estimates became another tool to dig out bargains.

Analyst Targets Indicated A 20.44% Disadvantage For 5 Highest-Yield, Lowest-Priced ReFa/Ro Stocks To January, 2023

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

As noted above, top 10 ReFa/Ro selected 2/14/23, showing the highest dividend yields in January represented five sectors: industrials (2); energy (1); utilities (1); financial services (5); real estate (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 31.65% Vs. (32) 39.78% Net Gains by All 10 To January, 2024

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 ReFa/Ro kennel by yield were predicted by analyst one-year targets to deliver 20.44% LESS net gain than $5k invested in all 10. The ninth lowest-priced ReFa/Ro top-yield equity, ZIM Integrated Shipping Services Ltd, was projected to deliver the best net gain of 120.51%.

The five lowest-priced ReFa/Ro top-yield dogs for February 14 were: Oxford Lane Capital Corp; Eagle Point Credit Co Inc.; Petroleo Brasileiro SA Petrobras; Trinity Capital Inc; Ellington Financial Inc with prices ranging from $5.86 to $13.72 per share.

Five higher-priced ReFa/Ro as of February 14 were: Genco Shipping & Trading Ltd; FS KKR Capital Corp; PIMCO Dynamic income Fund; ZIM Integrated Shipping Services Ltd; Kenon Holdings Ltd whose prices ranged from $18.44 to $30.65.

The distinction between five low-priced dividend dogs and the general field of 10 reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analysts' 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 433 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 33 December ReFa/Ro

(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)

Note that this month readers mentioned twenty-six Dogcatcher Ideal stocks that offer annual dividends from a $1K investment exceeding their single share prices.

26 Dogcatcher Ideal Dogs from January

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 FoFa/Ro 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. Open source dog art from dividenddogcatcher.com.

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