6 Buyable Reliable Retiree Dogs In April

Foreword

This article is based on two Kiplinger investing articles aimed at retirees:

20 Dividend Stocks to Fund 20 Years of Retirement (yielding roughly 4% or higher), updated 5/7/21, by Brian Bollinger, “…should fund at least 20 years of retirement, if not more. They have paid uninterrupted dividends for more than 20 consecutive years, appear to have secure payouts and have the potential to collectively grow… dividends to protect investors’ purchasing power.”

10 Super-Safe Dividend Stocks by Deborah Yao, published 4/30/21, featured “every stock on this list earns the highest DIVCON rating of 5. We’ve further culled the list down to 10 stocks that offer a total dividend and buyback yield of at least 2%, and price-to-earnings (P/E) ratios in the trailing 12 months that are below, or on par, with the broader market.”

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis; these Kiplinger reliable dividend stocks for retirees are perfect for the dogcatcher process. Here is the February 24 data for the 30 stocks in the Kiplinger-sourced collection.

The Ides of March 2020 plunge in the stock market took its toll, yet most of these retiree selections bounded back beyond broker targets.

The following six (as of March 25) continue to live up to the Dogcatcher ideal of delivering annual dividends from a $1K investment in excess of their single share prices: Enterprise Products Partners L.P. (EPD), Enbridge Inc. (ENB), Pembina Pipeline Corp. (PBA), Ennis Inc. (EBF), National Retail Properties Inc. (NNN), Old Republic International (ORI). (For the previous report there were seven but Monmouth Real Estate Investment (MNR) was sold to Industrial Logistics Properties Trust (ILPT) less than one week following that report.) Many investors regard the condition of annual dividends from a $1K investment in excess of their single share prices as a “look closer to maybe buy” signal.

Actionable Conclusions (1-10): Analysts Estimated 10.62% To 28.10% Net Gains For Ten Top Reliable Retirement Dividend Dogs To April 2023

Five of ten top Kiplinger reliable retirement stocks by yield were 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 April dogs was graded by Wall St. Wizards was 50% accurate.

Estimated dividends from $1000 invested plus their aggregated one-year analyst median target prices, as reported by YCharts, composed the metrics for the projections below. Note: target prices by lone-analysts were not applied. Ten probable profit-generating trades projected to March 25, 2023 were:

Best Buy Co., Inc. (BBY) was projected to net $281.01, based on dividends, plus the median of the target price estimates from twenty-one analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 52% over the market as a whole.

Verizon Communications Inc. (VZ) was projected to net $204.10, based on dividends plus upside estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 60% less than the market as a whole.

Enterprise Products Partners L.P. was projected to net $197.67, based on the median of target price estimates from twenty-three analysts, plus annual dividend, less broker fees (if any). The Beta number showed this estimate subject to risk/volatility 25% greater than the market as a whole.

Cboe Global Markets (CBOE) was projected to net $195.58, based on a median of target price estimates from thirteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 33% less than the market as a whole.

Colgate-Palmolive Co. (CL) was projected to net $181.19 based on dividends, plus the median of target estimates from twenty-one brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 37% less than the market as a whole.

Realty Income Corp. (O) was projected to net $168.26, based on dividends, plus the median of target price estimates from eighteen analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 21% under the market as a whole.

Washington Trust Bancorp (WASH) was projected to net $157.37, based on the median of target estimates from four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% under the market as a whole.

National Retail Properties Inc. was projected to net $146.85, based on the median of target price estimates from twelve analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 11% less than the market as a whole.

W. P. Carey Inc. (WPC) was projected to net $106.54, based on dividends, plus the median of target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% less than the market as a whole.

Procter & Gamble Co. (PG) was projected to net $106.17, based on dividends, plus median target price estimates from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 53% under the market as a whole.

The average net gain in dividend and price was estimated at 17.45% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 19% 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. So, (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”.

19 Kiplinger Reliable Retirement Dividend Stocks Show April Target Gains

29 Kiplinger Reliable Retirement Dividend Stocks Anticipate Positive April Yields

Actionable Conclusions (11-20): 10 Top Kiplinger Reliable Retirement Dividend Stocks By Yield For April

Top yield ten Reliable Retirement Dividend stocks represented five of eleven Morningstar sectors.

Three energy stocks occupied three of the top four places: Enterprise Products Partners L.P. [1], Enbridge Inc. [2], Pembina Pipeline Corp. [4]. Third place went to the lone industrials entity, Ennis Inc. [3].

Then the first of four real estate sector representatives, placed fifth, W. P. Carey Inc. [5]. The others placed seventh, eighth, and tenth, Universal Health Realty Income Trust (UHT) [7], National Retail Properties Inc. [8], and Realty Income Corp [10].

Sixth place went to the single communication services representative, Verizon Communications Inc. [6]. Finally, ninth place was claimed by a lone utilities representative, Pinnacle West Capital Corp. (PNW) [9], to complete the reliable retirement top ten dividend dogs, by yield, entering April.

Actionable Conclusions: (21-30) Ten Top Reliable Retirement Dividend Dogs Showed 14.28%-35.73% Upsides While (31) Two Poor Downsiders Slumped -3.24% and -5.59% Into March

To quantify top dog rankings, analyst mean price target estimates provide a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, analyst median target price estimates became another tool to dig out bargains.

Analysts Forecast A 9.77% Disadvantage For The 5 Highest Yield, Lowest Priced Of Top Ten Reliable Retirement Dividend Stocks Come April 2023

Yield (dividend/price) results provided by YCharts sourced the ranking for these ten top reliable retirement dividend dogs.

As noted above, top ten Kiplinger reliable retirement dogs screened 3/25/22 showed the highest dividend yields and represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top-Ten Highest-Yield Reliable Retirement Dividend Dogs (32) Delivering 7.8% Vs. (33) 8.65% Net Gains by All Ten Come April 2023

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten reliable retirement dividend kennel by yield were predicted by analyst 1-year targets to deliver 9.77% LESS gain than $5,000 invested as $.5k in all ten. The sixth lowest-priced selection, Verizon Communications Inc., was projected to deliver the best net gain of 20.41%

The five lowest-priced top-yield Kiplinger most-reliable retiree dividend dogs as of March 25 prices were: Ennis Inc., Enterprise Products Partners L.P., Pembina Pipeline Corp., National Retail Properties Inc., Enbridge Inc., with prices ranging from $18.50 to $46.36.

Five higher-priced Kiplinger top-yield reliable retirement dividend dogs as of March 25 were: Verizon Communications Inc., Universal Health Realty Income Trust, Realty Income Corp., Pinnacle West Capital Corp., W. P. Carey Inc., whose prices ranged from $51.28 to $81.53.

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 90% accurate on the direction of change, and just 0% to 10% 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

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

Six Ripe for Picking

The 6 above (as of March 25) lived up to the Dogcatcher ideal of having annual dividends from a $1K investment exceed their single share prices. Many investors regard this condition as a “look closer to maybe buy” signal.

Current vs. Fair Prices

Since five of the top ten Reliable Retiree shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those five plus five at current prices (top chart) with the fair pricing of all ten top dogs conforming to that ideal (middle chart). The dollar and percentage differences between current and fair prices are detailed in the bottom chart.

Kiplinger Retirees By Author

Stocks listed above were suggested only as possible reference points for your Retirement 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 Thomson/First Call in Yahoo Finance. Open source dog art from dividenddogcatcher.com