Actionable Conclusions (1-10): Analysts Predicted Top Ten „Safer“ Dividend Consumer Cyclicals To Net 4.5% to 31.58% Net Gains By June 2019
Six of the ten top „safer“ dividend Consumer Cyclicals WallStars (tinted gray in the chart above) were verified as also being among the top ten yielders for the coming year. Thus, the yield strategy for this group, as of June, proved 60% accurate.
The following probable profit-generating trades were selected by estimated dividend returns from $1,000 invested in each highest yielding stock. That dividend and the aggregate one-year analyst median target price, as reported by YCharts, created the 2018-19 data. Ten probable profit-generating trades projected to June 13, 2019 were:
CSS Industries (CSS) netted $315.78 based on a median of price estimates from two analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 13% more than the market as a whole.
Gannett (GCI) netted $181.93 based on a median price estimate from six analysts, and dividends less broker fees. A Beta number was not available for GCI.
Corus Entertainment (OTCPK:CJREF) netted $150.80 based on dividends, less broker fees. The Beta number showed this estimate subject to volatility 46% less than the market as a whole.
Imperial Holdings (OTCPK:IHLDY) netted $63.21 by dividends, less broker fees. The Beta number showed this estimate subject to volatility 4% more than the market as a whole.
Persimmon (OTCPK:PSMMF) netted $62.08 based on dividends less broker fees. The Beta number showed this estimate subject to volatility 37% less than the market as a whole.
Ford Motor (F) netted $61.53 based on a median price estimate from twenty-four analysts, and projected annual dividends, less broker fees. The Beta number showed this estimate subject to volatility 1% more than the market as a whole.
Persimmon (OTCPK:PSMMY) netted $61.49 based on dividends, less broker fees. The Beta number showed this estimate subject to volatility 18% less than the market as a whole
Marks & Spencer Group (OTCQX:MAKSY) netted $58.66 based on dividends alone, less broker fees. The Beta number showed this estimate subject to volatility 15% less than the market as a whole
Six Flags Entertainment (SIX) netted $53.16 based on a median price estimate from eleven analysts, and dividends less broker fees. The Beta number showed this estimate subject to volatility 13% more than the market as a whole.
Ford Otomotiv Sanayi (OTCPK:FOVSY) netted $45.22, based on dividends and a median of price estimates from twenty-eight analysts less broker fees. The Beta number showed this estimate subject to volatility 23% less than the market as a whole.
Average net gain in dividend and price was 10.54% on $10k invested as $1k in each of these ten “Safer” Consumer Cyclical dividend equities. This gain estimate was subject to average volatility 21% less 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.“
„Safer“ Dividend Consumer Cyclical May Equities
Yield (dividend/price) results from here June 13 supplemented by 1-year total returns (Annual) verified by Yahoo Finance for thirty-five of eighty-one stocks from the Consumer Cyclical sector revealed the actionable conclusions discussed here.
17 Industries Were Represented By 35 „Safer“ Dividend Consumer Cyclical Stocks
Of twenty-eight industries making up the Consumer Cyclical sector, the 35 ’safer‘ stocks selected by returns and yield for this writing represented 17.
The industry representation broke out, thus: Media – Diversified (1); Auto & Truck Dealerships (1); Residential Construction (3); Publishing (3); Department Stores (2); Auto Manufacturing (3); Broadcasting – TV (1); Resorts & Casinos (5); Specialty Retail (2); Home Furnishings (1); Leisure (4); Packaging & Containers (2); Gambling (2); Lodging (1); Apparel Stores (2); Auto Parts (1); and Marketing Services (1).
Top ten „safer“ dividend Consumer Cyclicals showing positive returns and the safety margin June 13 represented the first eight industries on the list above.
35 ‚Safer‘ Dividend Consumer Cyclical Firms Found
Periodic Safety Inspection
A previous article discussed the attributes of the 50 Top yield Consumer Cyclical stocks culled from the above master list of 81. Below is the list of 35 resulting from the „safety“ check noting positive annual returns and free annual cash flow yield sufficient to cover estimated annual dividend yield.
Corporate financial resources, however, are easily re-directed by any board of directors choosing to promote company policies cancelling or varying the payout of dividends to shareholders. This article contends that adequate cash flow is a strong reason for a company to sustain annual dividend increases.
Three additional columns of financial data, listed after the Safety Margin figures above, reveal payout ratios (lower is better), total annual returns, dividend growth levels, and P/E ratios for each stock. This data is provided to show additional methods to reach beyond yield to select reliable payout stocks. Positive results in all five columns after dividend ratio is a sterling financial accomplishment.
To quantify top equity rankings, analyst mean price target estimates provided a „market sentiment“ gauge of upside potential. Added to the simple high yield metric, analyst mean price target estimates became another tool to dig out bargains.
Yield Metrics Uncovered A 40% Advantage In Gains By Highest Yield, Lowest Priced „Safer“ Dividend Consumer Cyclical Equities
Ten „Safer“ Dividend WallStars June 13 per YCharts data ranked themselves as follows:
Actionable Conclusions: Analysts Estimated 5 Lowest Priced, of Ten „Safer“ High Yield Dividend Consumer Cyclicals, Would (13) Deliver 9.92% VS. (14) 6.24% Net Gains From All Ten By June 2019
$5,000 invested as $1k in each of the five lowest priced stocks in the „safer“ ten Consumer Cyclical WallStars pack by yield were determined by analyst 1-year targets to deliver 58.98% more net gain than $5,000 invested as $.5k in all ten. The fourth lowest priced „safer“ Dividend Consumer Cyclical stock, Gannett, showed the best net gain of 18.19% per analyst targets.
Lowest priced five „safer“ dividend Consumer Cyclicals June 13 were: Corus Entertainment; RTL (OTCPK:RGLXY); Marks & Spencer Group; Gannett; and Imperial Holdings, with prices ranging from $5.15 to $15.36.
Higher priced five „Safer“ Dividend Consumer Cyclical dogs as of June 13 were: New Media Investment Group (NEWM); Connect Group (OTCPK:SMWPY); Persimmon (PSMMF); Ford Otomotiv Sanayi; and Persimmon (PSMMY), with prices ranging from $18.18 to $75.81.
This distinction between five low priced dividend dogs and the general field of ten reflects the „basic method“ Michael B. O’Higgins employed for beating the Dow. The added scale of projected gains based on analyst targets contributed 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. Its also the work analysts got paid big bucks to do.
Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.
The net gain estimates mentioned 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.
See my instablog for specific instructions about how to best apply the dividend dog data featured in this article, this glossary instablog to interpret my abbreviated headings, and this instablog to aid your safe investing. – Fredrik Arnold
Stocks listed above were suggested for your „Safer“ Dividend Consumer Cyclical WallStars stock 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.ycharts. com; www.finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo from: therobotreport.com
Three or more of these top 94 Consumer Cyclical pups by yield qualify as valuable catches! Find them among the now 52 Dogs of the Week I found on The Dividend Dog Catcher premium site, or the 52 Dogs of the Week II now accumulating returns. Also, the Safari to Sweet Success (Dogs of the Week III) portfolio launched in early September. Click here to subscribe or get more information.
Make investing gains again. Catch your underdog on Facebook!
At 8:45 AM nearly every NYSE trading day on Facebook/ Dividend Dog Catcher Fredrik Arnold does a quick live video summary of one of four or five stocks contending for a single weekly slot in his Safari To Sweet Success portfolio.
Just go to Facebook/Dividend Dog Catcher at 8 AM most trading days and watch, like, comment and share the video. Of course you’re welcome to view all the replays, too, at anytime.
Yet always remember: Root for the Underdog.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.