Readers Reveal 30 Ideal December Dividend Dogs

Reader Selections

Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a reader favorite listing in this series of articles. Thus, It is possible that only rogues and discontinued, or dreadful, doubtful, dividend issues may appear.

Lately readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however, praise the effort to sort promising opportunities out of the thousands of dividend offers. After all, yield counts when searching for dividend winners.

Furthermore, my dog catching is, by method, a contrarian investing strategy and that can rub some investors the wrong way. It is most useful for new buyers; intended to guide readers to new purchases of dogs on the dips.

Most valuable to the writer, however, are those reader comments that truly catch errors in my calculations or changes in direction. Examples like the reader who missed my “safer” dividend follow-up articles because they contain dividend payout ratios.

There are also those who catch flagrant fouled stock lists not synchronized with the data charted. In January, a reader discovered a ‘Safer’ net gain chart posing as a Monthly Pay chart that even Seeking Alpha Editors missed. In February, the pending demise of my four S&P 500 Aristocrat buy suggestions caught reader attention.

Every month, some discover errant ticker symbols. Last month, a reader noted SSSS hadn’t paid a Q Dividend since April. And earlier this year, a reader asked how to identify Rogues in the ReFa/Ro list. The top ten are now identified.

In June high yields were alleged, by one reader, to be sure signs of Rogueishness. Not true, high yields are sure signs of high yield, how long the elevated yield lasts, depends on share price and corporate directors. High Beta is the most accurate measure of Rogueishness.

Reader suggestions of buy and hold dividend stocks are most welcome and sure to be reported on my ReFaRo posts. That’s my ultimate goal, of course, to find ten or twenty sure-fire long-term dividend payers purchased when their single share prices are lower than the dividend paid from

$1K invested. Suggestions, please! We’re trying to predict the future here, Kings and Aristocrats might hold up but may be too old and feeble to last.

In February, one reader suggested an option strategy for monthly paying dividend stocks:

“You should identify where options are available on the Monthly dividend stocks. What I do is find mopay stocks with options, I buy and write covered calls about 6 – 12 months out. I look for a scenario where I collect the dividend and get my stock bought back at a much lower price than I pay, but pocket a premium that makes up the loss. This gives me a dividend boost, since my cost is lower. It’s like a guaranteed CD with little risk.”

Another reader suggested I dial-back my blatant opinion that high-yield equates to high-risk:

“The article says “high dividends are a sure sign of high risk”.

It should be “high dividends might be a sign of high risk”.

“If a good stock/ETF/CEF with a 5% dividend drops simply because the whole market dropped, the dividend could get to 8 or 9%. I think that’s a great time to buy because the high dividend and low price makes it a low risk investment. “

More than one writer has decried my favoritism for low-priced stocks. They especially dislike my “ideal” stocks whose dividend returns from a $1k investment equaling or exceeding share price. A prime example is Sirius XM Holdings Inc. (SIRI), the satellite radio and pandora music catalog owner, priced now at $5.94 easily passes my test (of dividends from $1k invested exceeding share price) with a forward dividend of 1.64%! A little under $1k investment now buys 168 shares. and they’ll throw the owner a return (from $1k invested) near triple the share price. Assuming all things remain equal, SIRI dividends alone will pay back their purchase price in 61 years (and that assumes the satellite radio and subscription music service can survive that long)!

In August, a reader said a $15.40 dividend on a $1K investment was too small. I point out that holders of AAPL stock now garner about $7.00 in dividends from $1K invested.

Every month, readers grumble that they can’t find my seven previous Dog of the week portfolios in my Dividend Dogcatcher service on the SA Marketplace site. This year, SA has listed all the postings on my Dogcatcher service by date. So to find the summary and reference guide to each portfolio, look at:

August 22, 2015, for I

October 13, 2016 for II

September 12, 2017 for III

September 13, 2018 for IV (Ivy)

September 8, 2019 for V (Volio)

September 12, 2020 for VI (Vista)

October 10, 2021 for VII (Viital)

October 8, 2022 for VIII (Viking).

Incidentally, the VIII portfolio of Dividend Dogs for each week (Viking) launched, on October 3, 2022. The Viking SA Marketplace reports have been gathering since November 4.

Foreword

Note that this month, readers mentioned 30 stocks whose dividends from a $1K investment exceeded their single share prices. These are listed below by yield:

The ReFaRo December Ideal Dividend Dogs

Above are the 30 ideal candidates derived from the 40 tangible results from reader favorite & rogue equities received prior to December 30, 2022. YCharts data for this article was collected as of 1/9/23.

Actionable Conclusions (1-10): Brokers Estimated 17.28% To 71.47% Net Gains From 10 ReFa/Ro Stocks To January 2024

Six reader-favorite top-yield stocks were verified as being among the top 10 gainers for the coming year based on analyst one-year target-prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for reader-fave stocks, as graded by Wall St. wizards, was deemed 60% accurate.

Estimated dividend returns from $1k invested in each of the highest yielding stocks, plus the median one-year analyst target prices, as reported by YCharts, created the 2023-24 data points which identified probable profit-generating trades. (Note: one-year target prices by lone analysts were not counted.) Thus, ten probable profit-generating trades projected to January 9, 2024, were:

Orchid Island Capital Inc. (ORC) netted $714.67 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 54% over the market as a whole. ORC is Rogue, watch out for falling dividends!

Genco Shipping & Trading Inc. (GNK) netted $639.66.52 based on the median of target price estimates from 7 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% over the market as a whole. It’s somewhat a rogue.

Trinity Capital Inc. (TRIN) was projected to net $396.24, based on the median of target estimates from 7 analysts, plus annual dividend, less broker fees. A Beta number was not available for TRIN. With no beta, it’s hard to know but for now, call TRIN a rogue.

Credit Suisse X-Links Crude Oil Shares Covered Call ETN (USOI) was projected to net $387.80, based on dividend alone, less broker fees. The Beta number showed this estimate subject to risk/volatility 51% over the market as a whole. It’s a Rogue.

FS KKR Capital Corp (FSK) was projected to net $291.70, based on the median of target price estimates from 8 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% over the market as a whole. It’s rogue.

Himax Technologies Inc (HIMX) was projected to net $247.06, based on the median of target price estimates from 4 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 95% over the market as a whole. HIMX is rogue.

Walgreens Boots Alliance Inc (WBA) was projected to net $195.48, based on the median of target price estimates from 14 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% under the market as a whole. This is a fave.

Ellington Residential Mortgage REIT (EARN) was projected to net $192.73 based on the median of target price estimates from 2 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 70% greater than the market as a whole. A Rogue.

Verizon Communications Inc (VZ) was projected to net $174.69, based on the median of target price estimates from 23 analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 63% under the market as a whole. A fave.

ProShares K-1 Free Crude Oil Strategy (OILK) was projected to net $172.80 based on dividends only, less broker fees. The Beta number showed this estimate subject to risk/volatility 104% over the market as a whole. A rogue for many reasons.

Average net gain in dividend and price was estimated at 34.13% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk/volatility 36% over the market as a whole. December 2022, top-ten gainers counted eight rogues, and two faves.

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. So, the highest yielding stocks in any collection have become affectionately known as “dogs.” More precisely, these are, in fact, best called, “underdogs.”

40 For the Money

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for ReFa/Ro stocks as of market closing prices 12/6/22 for 40 equities and funds revealed the actionable conclusions discussed below.

See any Dow 30 article for an explanation of the term “dogs” for stocks reported based on Michael B. O’Higgins book “Beating The Dow” (HarperCollins, 1991), now named Dogs of the Dow. O’Higgins’ system works to find bargains in any collection of dividend paying stocks. Utilizing analysts’ price upside estimates expanded the stock universe to include popular growth equities, as desired.

40 ReFa/Ro By Target Gains

Actionable Conclusions (11-20): ReFa/Ro Top (Rogue) ETN, USOI, Led 40 By Yield Through December

The 40 ReFa/Ro sorted by yield included 9 of 11 Morningstar sectors plus 3 exchange traded notes [ETNs], no exchange traded funds [ETFs], and 8 closed end investment companies [CEICs], among the selections.

The ten top reader-mentions by yield in December, were led by the first of two exchange traded note [ETN] representatives, Credit Suisse X-Links Crude Oil Shares Covered Call ETN [1]. The other ETN member placed sixth, ETRACS 2xMonthly Pay Leveraged US Small CapHiDividend ETN (SMHB) [6].

Second place went to the first of three financial services sector representatives in the top ten, Trinity Capital Inc [2]. The others placed ninth and tenth, Oxford Lane Capital Corp (OXLC) [9], and Eagle Point Credit Co Inc (ECC) [10].

In third place was the lone industrials representative in the top ten, Genco Shipping & Trading Ltd [3].

The top two closed end investment companies (CEICs) placed fourth and eighth, ProShares K-1 Free Crude Oil Strategy Fund [4], and Stone Harbor Emerging Markets Total Income Fund (EDI) [8].

The lone technology representative placed fifth, Himax Technologies Inc [5].

Thereafter, one real estate representative placed seventh, Orchid Capital Inc [7], which completed the top 10 ReFa/Ro by yield as of December 31, 2022.

Actionable Conclusions: (21-30) Top 10 ReFa/Ro By Price Upsides Showed 6.19% To 55.42% Increases To December 2023.

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

Analyst Targets Indicated A 45.22% Disadvantage For 5 Highest-Yield, Lowest-Priced Re/Fa/Ro Stocks To December 2023

10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top 10 ReFa/Ro selected 1/9/23, showing the highest dividend yields in December represented: ETNs (2); financial services (3); industrials (1); closed-end investment companies (2); technology(1); real estate (1).

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of Top 10 Highest-Yield Reader Favorites & Rogues To (31) Deliver 17.44% Vs. (32) 31.83% Net Gains by All 10 To December 2023

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 ReFa/Ro kennel by yield were predicted by analyst one-year targets to deliver 45.22% LESS net gain than $5k invested in all 10. The sixth lowest-priced ReFa/Ro top-yield equity, Orchid Island Capital Inc, was projected to deliver the best net gain of 71.47%.

The five lowest-priced ReFa/Ro top-yield dogs for January 9 were: Stone Harbor Emerging Markets Total Income Fund; Oxford Lane Capital Corp; Himax Technologies Inc; ETRACS 2X Monthly Pay Leveraged US Small Cap High Dividend ETN; Eagle Point Capital Co Inc, with prices ranging from $4.95 to $10.64 per share.

Five higher-priced ReFa/Ro as of January 9 were: Orchid Island Capital Inc ; Trinity Capital Inc; Genco Shipping & Trading Ltd; ProShares K-1Free Crude Oil Strategy Fund; Credit Suisse X-Links Crude Oil Shares Covered Call ETN, whose prices ranged from $11.26 to $82.69.

The distinction between five low-priced dividend dogs and the general field of 10 reflected Michael B. O’Higgins’ “basic method” for beating the Dow. The scale of projected gains based on analysts’ 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 40 equities and funds discussed in this article were submitted within comments from Seeking Alpha members noted below.

Afterword

Here is the full pack of 40 December ReFa/Ro

(Listed alphabetically by ticker symbol, the pack includes the nicknames of recommending readers.)

Note that this month readers mentioned thirty Dogcatcher Ideal stocks that offer annual dividends from a $1K investment, exceeding their single share prices.

30 Dogcatcher Ideal Dogs for December

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.

Stocks listed above were suggested only as possible reference points for your FoFave/Ro dog stock purchase or sale research process. These were not recommendations.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.