AAII Platinum Top Dogs Fetch 8 Ideal Dividend Buys In December

Foreword

This article is based on a AAII Journal article, aimed at showing a sample of stocks held in each model portfolio with currently attractive grades. The article is titled The Platinum 30: Choice Stocks From AAII’s…Model Portfolios. It was written by Jack Gilleland. an assistant analyst at AAII.

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this collection of AAII Top Dog Stocks is perfect for the dogcatcher process. Below are the December 8, 2022 data for 30 dividend stocks parsed by YCharts.

The prices of 8 of these 30 Top Dog Stocks (listed by yield) made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 8 Dogcatcher ideal AAII Top Dogs for December were: Danaos Corp. (DAC); Intel Corp. (INTC); Walgreens Boots Alliance (WBA); NRG Energy Inc. (NRG); Bassett Furniture Industries Inc. (BSET); Algoma Steel Group Inc. (ASTL); CNO Financial Group Inc. (CNO); Sirius XM Holdings Inc. (SIRI).

All eight 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.

Actionable Conclusions (1-10): Analysts Estimated 19.23% To 72.97% Net Gains For Top Ten AAII Top Dog Stocks To December, 2023

Five of ten top AAII Top Dog stocks by yield was 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 December dogs, as graded by Wall St. Wizards, was 50% accurate.

Estimated dividends from $1000 invested in each of the highest yielding AAII Top Dog 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 December, 2023 were:

Bassett Furniture Industries Inc was projected to net $729.71, based on the median of target estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 54% greater than the market as a whole.

Danaos Corp was projected to net $725.10, based on dividends, plus the median of target price estimates from 3 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 52% greater than the market as a whole.

Carlisle Companies Inc. (CSL) was projected to net $385.03, based on dividends, plus the median of target price estimates from six analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% under the market as a whole.

APA Corp. (APA) was projected to net $294.67, based on the median of estimates from 27 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 286% greater than the market as a whole.

NRG Energy Inc was projected to net $282.72, based on dividends, plus the median of target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% under the market as a whole.

CSG Systems International (CSGS) was projected to net $270.55 based on dividends, plus the median of target price estimates from 3 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 18% under the market as a whole.

Encore Capital Group Inc. (ECPG) was projected to net $248.84 based on the median of target price estimates from four analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% more than the market as a whole.

Synopsys Inc. (SNPS) was projected to net $245.26, based on the median of target price estimates from 15 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% greater than the market as a whole.

Celanese Corp. (CE) was projected to net $204.69, based on dividends, plus median target price estimates from 22 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% more than the market as a whole.

Medtronic plc (MDT) was projected to net $192.25, based on dividends, plus the median of target price estimates from twenty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% under the market as a whole.

The average net gain in dividend and price was estimated at 35.79% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 57% over 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”.

30 AAII Top Dog Stocks Per December Analyst Targets

30 AAII Top Dog Stocks Per December Yield Data

Actionable Conclusions (11-20): Ten Top AAII Top Dog Stocks By Yield

Top ten July AAII Top Dog Stocks by yield represented seven of eleven Morningstar sectors. First place went to the lone industrials sector equity, Danaos Corp [1].

Second place, was claimed by the lone technology sector representative in the top ten, Intel Corp [2]. Then , two healthcare representatives took the third and seventh slots, Walgreens Boots Alliance [3], and Medtronic PLC [7].

The fourth place went to the lone utility in the top ten, NRG Energy Inc [4]. Then fifth place was occupied by the top financial services representative, First America Financial Corp (FAF) [5].

Sixth place went to the consumer cyclical representatives Bassett Furniture Industries Inc [6].

Finally, three basic materials representatives took the eighth to tenth slots, Algoma Steel Group Inc [8], Huntsman Corp (HUN) [9], and Celanese Corp [10], to complete the top ten AAII Top Dog pack for December.

Actionable Conclusions: (21-30) Ten Top AAII Top Dog Stocks Showed 18.26%-70.39% Upsides While (31) Four Down-siders Fell -0.04% to -4.37% To December, 2023.

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, the median of analysts target price estimates became another tool to dig out bargains.

Analysts Forecast A 1.81% Disadvantage For 5 Highest Yield, Lowest Priced, of 10 AAII Top Dog Stocks To December, 2023

Ten-top AAII Top Dog Stocks were culled by yield for this update. Yield (dividend / price) results provided by YCharts 12/8/22 did the ranking.

As noted above, top-ten AAII Top Dog Stocks screened 12/8/22, showing the highest dividend yields, represented seven of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top-Ten AAII Top Dog Stocks (32) Delivering 26.02% Vs. (33) 26.50% Net Gains by All Ten Come December, 2023

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten AAII Top Dog kennel by yield were predicted by analyst 1-year targets to deliver 1.81% LESS gain than $5,000 invested as $.5k in all ten. The second lowest-priced selection, Bassett Furniture Industries Inc, was projected to deliver the best net gain of 72.97%.

The five lowest-priced top-yield AAII Top Dogs as of December 8 were: Algoma Steel Group Inc; Bassett Furniture Industries Inc; Huntsman Corp; Intel Corp; NRG Energy Inc, with prices ranging from $6.33 to $32.18.

Five higher-priced AAII Top Dogs as of December 8 were: Walgreens Boots Alliance; First American Financial Corp; Danaos Corp; Medtronic PLC; Celanese Corp whose prices ranged from $40.90 to $101.18.

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 30 AAII Top Dog stocks. The article focuses whole collection so the original distinctions between the eight portfolios in the collection is neglected. Therefore, below are the original lists of 30 stocks grouped by topic.

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 8 of these 30 AAII Top Dog Stocks (listed by yield) made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

8 Dogcatcher Ideal Stocks for December

All eight 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 8 are ‘safer’ dividend dogs? To find the answer, find my ‘Safer’ December Dividend Dogcatcher follow-up market piece for these AAII stocks in the Dividend Dogcatcher Marketplace appearing on or about December 17.

How All Ten Top AAII Top Dog Stocks Could Become Ideal and Fair Priced

Since eight of the top ten AAII High Yield/ High Rising shares are now priced less than the annual dividends paid out from a $1K investment, the above charts show the dollar and percentage difference between the recent and fair priced in the top chart.

The eight plus the two at recent prices are shown in the middle chart, with fair pricing of all ten top dogs conforming to the dog catcher ideal populates the bottom chart.

With renewed downside market pressure to 48%, it is possible for all ten highest-yield AAII Top Dog stocks, to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a big head-start with seven 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.

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. Dog image: Open source dog art from dividenddogcatcher.com