Buy 9 September Inflation Buster Ideal Dividend Dogs

Foreword

This article is based on five Kiplinger, and Barron’s articles, aimed at finding “Inflation Busting” stocks for 2022. The title and links to the articles are below:

24 Pricing Power Performers

“With inflation pressures surging, pricing power relative to cost exposures will be a key theme and source of [absolute outperformance] for global equity markets,” writes the UBS Equity Strategy team.—by: Dan Burrows April 14, 2022.

7 REITS with Rising Dividends

REIT dividends are expected to post double-digit percentage growth this year, making the yield-friendly sector all the more attractive.—by: Lisa Springer April 13, 2022.

10 Stocks for Rising Interest Rates

The Federal Reserve has signaled in no uncertain terms that interest rates will head higher in 2022. Here are 10 of the best stocks for this environment. —by: Jeff Reeves April 4, 2022.

5 Stocks To Stave Off Sizzling inflation

Income investors like utility stocks for their stability and generous dividends. Here are 12 top-rated ones to watch in the new year. —by: Dan Burrows February 10, 2022.

6 Dividend Stocks Whip Inflation

The hot new investment theme isn’t socially nuanced crypto space finance or metaverse charging networks for virtual vehicles. It’s dividends—cash payments to shareholders.

To find more dividend growers, Barron’s used an approach inspired by the Federal Reserve’s so-called dot plot, or path of expected interest rate hikes. We screened the S&P 500 for companies that analysts predict will increase payments nicely in the years ahead. Here are six. —By Jack Hough Updated April 24, 2022 / Original April 22, 2022

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis. This collection of Kiplinger and Barron’s articles, aimed at finding the “Inflation Busting” stocks for 2022, is perfect for the dogcatcher process. Below are the September 9 “Inflation-Busters” as parsed by YCharts.

The prices of 9 of these 48 Kiplinger and Barron’s dividend selections, made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 9 Dogcatcher Ideal “Inflation Busting” stocks for August are: BHP Group Ltd (BHP); Arbor Realty Trust Inc (ABR); Alliance Bernstein Holding (AB); Ares Capital Corp (ARCC); British American Tobacco PLC (BTI); VICI Properties Inc (VICI); Navient Corp (NAVI); PacWest Bancorp (PACW); and HP Inc (HPQ).

Those nine all 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 9 are “safer” dividend dogs? To find the answer, find my “Safer” August Dividend Dogcatcher follow-up detailing these Kiplinger, and Barron’s “Inflation-Busting” stocks for 2022 in the Seeking Alpha Marketplace appearing on or about September 20. Simply click on the link in the last Summary bullet point above.

Actionable Conclusions (1-10): Analysts Estimated 21.59% To 62.69% Net Gains For Ten Top “Inflation-Busting” Dividend Stocks To September, 2023

Three of ten top “Inflation Buster” dividend stocks by yield were 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 July dogs was graded by Wall St. Wizards as 30% accurate.

Estimated dividends from $1000 invested in each of the highest yielding ”Inflation Buster” 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 September, 2023 were:

Taiwan Semiconductor Manufacturing Co Ltd (TSM) was projected to net $626.93, based on the median of target estimates from 10 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 1% less than the market as a whole.

NexPoint Residential Trust (NXRT) was projected to net $435.08, based on the median of estimates from six analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% greater than the market as a whole.

PacWest Bancorp was projected to net $396.92 based on the median of target price estimates from 9 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% greater than the market as a whole.

British American Tobacco was projected to net $387.83 based on dividends, plus the median of target estimates from 3 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 43% greater than the market as a whole.

Arbor Realty Trust Inc was projected to net $295.55, based on the median of target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 82% greater than the market as a whole.

Alexandria Real Estate Equities Inc (ARE) was projected to net $283.57, based on dividends, plus the median of target price estimates from 12 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% greater than the market as a whole.

Broadcom Inc (AVGO) was projected to net $282.29, based on dividends, plus the median of target price estimates from 23 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% above the market as a whole.

Hasbro Inc (HAS) was projected to net $262.80, based on dividends, plus the median of target price estimates from 13 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 23% less than the market as a whole.

Fifth Third Bancorp (FITB) was projected to net $220.44, based on dividends, plus median target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% greater than the market as a whole.

Discover Financial Services (DFS) was projected to net $215.89, based on dividends, plus the median of target price estimates from 17 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 43% over the market as a whole.

The average net gain in dividend and price was estimated at 34.07% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 13% above the market as a whole.

The Dividend Dogs Rule

Stocks earned the “dog” moniker by exhibiting three traits: (1) paying reliable, repeating dividends; and (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.”

48 Inflation Busters For 2022 Per September Analyst Target Data

48 Inflation Busters 2022 Dividends By September Yields

Actionable Conclusions (11-20): Ten Top Inflation Busters By Yield For 2022

Top ten 2022 “Inflation-Busting” stocks by yield in August represented five of eleven Morningstar sectors. First place went to the lone basic materials member, BHP Group Ltd.

The second and seventh places were claimed by real estate sector representatives Arbor Realty Trust Inc [2] and Vici Properties Inc [7].

Positions three, four, eight, and nine were claimed by financial services sector members: Alliance Bernstein Holding LP [3]; Ares Capital Corp [4]; Navient Corp [8]; PacWest Bancorp [9].

Two consumer defensive stocks took the fifth and sixth slots on this list: British America Tobacco PLC [5] and Phillip Morris International Inc (PM) [6].

Finally, a lone technology member placed tenth, HP Inc (HPQ) to complete the top ten “Inflation Busters” for 2022 dividend pack as of September 9.

Actionable Conclusions: (21-30) Ten Top “Inflation Buster” Dividend Payers For 2022 Showed 19.8%-61.41% Upsides While (31) No Down-siders Stumbled In September

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, median analyst target price estimates became another tool to dig out bargains.

Analysts Forecast A 9.59% Advantage For 5 Highest Yield, Lowest Priced, of 10 Inflation Busting Stocks for 2022

Ten top Kiplinger, and Barron’s dividend selections, aimed at finding the “Inflation Busters” for 2022 were culled by yield for this update. Yield (dividend / price) results provided by YCharts did the ranking.

As noted above, top ten Kiplinger, and Barron’s dividend selections, aimed at finding the best Inflation Buster stocks for 2022 screened 9/9/22, showing the highest dividend yields, represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Best Bets for 2022 Dividend Stocks (32) Delivering 23.75% Vs. (33) 21.67% Net Gains by All Ten Come September, 2022

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Kiplinger, Barron’s, and Dogs of the Dow dividend selections, aimed at finding the “Inflation Busters” for 2022 by yield were predicted, by analyst 1-year targets, to deliver 9.59% more gain than $5,000 invested as $.5k in all ten. The fourth lowest-priced selection, PacWest Bancorp, was projected to deliver the best net gain of 39.69%.

The five lowest-priced top-yield Kiplinger, and Barron’s dividend selections, aimed at finding the “Inflation Busters” for 2022 as of September 9, were: Navient Corp; Arbor Realty Trust Inc; Ares Capital Corp; PacWest Bancorp; HP Inc, with prices ranging from $14.53 to $28.26.

Five higher-priced Kiplinger, and Barron’s dividend selections, aimed at finding the “Inflation Busters” for 2022 as of September 9 were: VICI Properties Inc; British American Tobacco PLC; AllianceBernstein Holding LP; BHP Group Ltd; Phillp Morris International Inc, whose prices ranged from $33.72 to $97.06.

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 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 48 Kiplinger, and Barron’s “Inflation Buster“ selections for 2022. The article focuses on the top 30 or so dividend payers. Thus, nearly one third of the original list of companies is neglected. Therefore, below is the complete list of 48 stocks grouped by source.

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 9 of these 48 Kiplinger, and Barron’s dividend selections, as “Inflation-Buster” stocks for 2022 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 9 Dogcatcher ideal “inflation-Busting” dividend stocks for September are:

Those nine all 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 9 are “safer” dividend dogs? To find the answer, find my ‘Safer’ September Dividend Dogcatcher follow-up detailing these Kiplinger, and Barron’s Inflation-Busting stocks for 2022 in the Seeking Alpha Marketplace appearing on or about September 20. Simply click on the link in the last Summary bullet point at the top of this article.

How All Ten Top “Inflation Buster” 2022 Stocks Could Become Ideal Fair-Priced Dogs

Since nine of the top ten Kiplinger and Barron’s “Inflation Buster” stocks for 2022 shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those nine plus one at recent prices.

The dollar and percentage differences between recent and fair prices are detailed in the top chart. The current prices are shown in the middle chart, with the fair pricing of all ten top dogs, conforming to the dogcatcher ideal, detailed in the bottom chart.

With renewed downside market pressure to 27.4%, it is possible for all ten highest-yielding Kiplinger & Barron’s Inflation-Busting Dividend stocks to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a nice head-start with nine of ten already fairly 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.