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Foreword
A reader of August 2019’s high-yield, low-priced dividend dog list called it, “dangerous advice”. Hence, this information is to be used at your own risk.
I have always advised that high dividends portend high risk. Combine that signal with a low-price offer and you have the stuff of legends and horror stories. Especially in light of YCharts declaration that YCharts allows a dividend yield to persist for 365 days after the most recent reported dividend if a dividend is cut. Therefore, a few line items you see calculated here could be totally inaccurate. (Most of the time YCharts withholds forward yield projections when a dividend is cut, however… but not always).
These 72 June selected stocks reported total annual returns ranging from 3.32% to 451.84%. Any candidates this month showing yields greater than 21% were removed because their dividends are the most likely to be cut or curtailed. I did nothing about Chinese-based high yielders, but China has announced a preference for home-grown investors and could ban Chinese corporations from international stock market listings in the future.
Another caveat holds for Russian listings. With Putin’s war with Europe raging, the price drop in Russian stocks sent yields over 21% and thus off this list this month. Raising the market cap from $100M to $200M, and not listing stocks with negative price returns kept the list at 72 the last two months and kept ARR (ARR) and AGNC (AGNC) and other regulars off this listing. Oh, well, July will generate a new list. Maybe those missing will become positive in price returns and rejoin the pack.
Happy hunting, and beware of the numbers put up from the top ten by yield on this list of 72. In short, this is risky business. These are Dogs of the Low, not of the Dow. These dogcatcher metrics are set to snag the most unloved and unpopular curs as a contrarian stock selection strategy.
Meanwhile, all but one of the 72 stocks on this list, show dividends from a $1K investment greater than their single share prices. Some investors find this condition to be an invitation to, at least, look closer.
Actionable Conclusions (1-10): Brokers Calculated 19.02% To 50.57% Net Gains For The Top Ten 10%+ Yield Stocks As Of June 9, 2023
Three of those ten top-yield 10%+ Yield stocks (tinted in the list below) were among the top-ten gainers for the coming year, based on analyst 1-year targets. Thus, this forecast, as graded by Wall St. Brokers, was 30% accurate.
Dividends from $1,000 invested in the highest-yielding stocks and the median of analyst-estimated one-year target prices, as reported by YCharts, created the 2022-23 data points for the following estimates. Note: one-year target prices from lone analysts were not applied (n/a). Ten estimated profit-generating trades to June 9, 2023 were:
Star Bulk Carriers Corp. (SBLK) was projected to net $505.69 based on dividends plus the median of target estimates from eight brokers, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% under the market as a whole.
Diana Shipping Inc. (DSX) was projected to net $497.33, based on dividends plus the median of prices estimated by four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% under the market as a whole.
Braskem SA (BAK) was projected to net $480.94 based on dividends plus the median of target estimates from seven analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 67% over the market as a whole.
China Petroleum & Chemical Corp. (SNP) was projected to net $417.83 based on dividends, plus the median of target estimates from four analysts less broker fees. The Beta number showed this estimate subject to risk/volatility 29% under the market as a whole.
Genco Shipping & Trading Ltd. (GNK) was projected to net $337.76, based on dividends plus the median of target estimates from eight brokers, less broker fees. The Beta number showed this estimate subject to risk/volatility 15% under the market as a whole.
Himax Technologies Inc. (HIMX) netted $327.78 based on dividends plus the median of target estimates from four brokers, less broker fees. The Beta number showed this estimate subject to risk/volatility 101% over the market as a whole.
Eagle Bulk Shipping Inc. (EGLE) was projected to net $296.18, based on dividends plus the median of target estimates from eight brokers, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% greater than the market as a whole.
Chimera Investment Corp (CIM) was projected to net $242.27, based on dividends plus the median of target estimates from four analysts less broker fees. The Beta number showed this estimate subject to risk/volatility 1% greater than the market as a whole.
FS KKR Capital Corp (FSK) was projected to net $218.35, based on dividends plus the median of target estimates from eight brokers, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% greater than the market as a whole.
Newtek Business Services Corp (NEWT) was projected to net $190.19, based on dividends plus the median of target estimates from two analysts less broker fees. The Beta number showed this estimate subject to risk/volatility 7% greater than the market as a whole.
The average net-gain in dividend and price was estimated to be 35.14% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 7% greater than 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”.
39/72 Broker Price Target Up/Dn-sides
50/73 10%+ Yield Top-Dogs By Yield
Actionable Conclusions (11-20) Top Ten 10%+ Yield June Stock Yields Ranged 15.56%-20.70%
Top ten 10%+ Yield dogs selected 6/9/22 by yield represented five of eleven Morningstar sectors.
First place was earned by the first of three industrials sector stocks in the top ten, Star Bulk Carriers Corp[1].The other industrials members placed fourth, and seventh, Diana Shipping Inc. [4], and Bilfinger SE (OTCPK:BFLBY) [7].
Second place was captured by the lone communication services representative, Tele2 AB (OTCPK:TLTZY) [2]. Then third, sixth, and ninth places went to financial services members, KBC Group SA/NV (OTCPK:KBCSY) [3], Nordea Bank Abp (OTCPK:NRDBY) [6], and Intesa Sanpaolo (OTCPK:ISNPY) (9).
Thereafter, two basic materials stocks in the top ten, placed fifth and eighth, Labrador Iron Ore Royalty Corp (OTCPK:LIFZF) [5], and Eregli Demir Ve Celik Fabrikalari TAS (OTCPK:ERELY) [9].
Finally a lone energy member placed tenth, China Petroleum & Chemical Corp [10] to complete the 10%+Yield top ten for June, 2022-23.
Actionable Conclusions: (21-30) Ten 10%+ Yield Stocks Showed 6.66% To 34.58% Upsides To June 9, 2023 and (31) No Down-siders Hit Negative Notes
To quantify top yield rankings, analyst median price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, analyst median price target estimates became another tool to dig out bargains.
Analysts Estimated A 10.45% Disadvantage For 5 Highest Yield, Lowest Priced, Of Ten 10%+ Yield Dogs To June 9, 2023
Ten top 10%+ Yield dogs were culled by yield for this June update. Yield (dividend/price) results verified by Yahoo Finance did the ranking.
As noted above, top ten 10%+ Yield dogs selected 6/9/22 showing the highest dividend yields represented five of eleven sectors in the Morningstar scheme.
Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Top Ten Highest-Yield 10%+Yield Dogs (31) Delivering 22.7% Vs. (32) 25.35% Net Gains From All Ten By June 9, 2023
$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten 10%+ Yield dogs collection was predicted by analyst 1-year targets to deliver 10.45% less net gain than $5,000 invested as $.5k in all ten. The eighth-lowest priced Star Bulk Carriers Corp. was projected by analysts to deliver the best net gain of 50.57%.
The five lowest-priced top 10%+ Yield stocks as of June 9 were: Diana Shipping Inc.; Tele2AB; Bilfinger SE; Eregli Demir Ve Celik Fabrikalari TAS; Nordea Bank Abp, with prices ranging from $6.37 to $12.54.
Five higher-priced >10%Yield dogs from June 9 were: Intesa Sanpaolo; Labrador Iron Ore Royalty Corp.; Star Bulk Carriers Corp.; KBC Group SA/NV; China Petroleum & Chemical Corp, whose prices ranged from $12.43 to $47.24.
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
Below is the listing (alphabetically by ticker symbol), of all 72 10%+ Yield stocks from YCharts as of 6/9/22.
72 10%+ Yield Dogs For June
Note: All 72 (save one stock) on this list show dividends from a $1K investment greater than their single share prices. Some investors find this condition to be an invitation to buy or, at least, look closer.
Stocks listed above were suggested only as possible reference points for your 10%Yield-Priced dividend dog purchase or sale research process. These were not recommendations.
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.
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.
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