This article is based on five Kiplinger investing articles, plus one from Barron’s Weekly, aimed at survival qualities endemic to our Covid-19 locked down recovery times:
Pros’ Picks: The 15 Best Nasdaq Stocks, by Dan Burrows, published 5/13/20, “screened the Nasdaq Composite for stocks followed by a minimum of 10 analysts [and]… stocks with an average broker recommendation of Buy or better [to find]…the top-scoring names. The process gave us a host of stocks, from small biotechnology plays to some of the biggest, best-known companies in the world.”
20 Best Stocks to Invest In During a Recession, by Will Ashworth, published 2/25/20, “The International Monetary Fund believes the world economy will remain in a weakened state all year, with GDP contracting 3% – before rebounding with 5.8% growth in 2021. The companies best suited to survive, if not thrive, in this kind of environment, are defensive stocks that provide products and services people simply can’t live without.”
11 Best Stocks to Ride Out the Coronavirus Outbreak, by Charles Lewis Sizemore, CFA, published 4/16/20 “We’ll get through this. But in the meantime, we have to deal with a stock market that could suffer considerably at the hands of this worldwide health scare.”
11 Best E-Commerce Stocks for Electrifying Returns, by Patrick Sanders, published 5/5/20, “E-commerce giants have risen to the challenge and largely met consumer expectations,” says Jeremie Capron, director of research at New York-based index, advisory, and research company Robo Global. “As a result, we expect an increase in adoption, not only during this crisis but also on the other side of it.”
10 Health and Pharmaceutical Companies Fighting the COVID-19 Coronavirus, by Lisa Springer, published 3/12/20 updated 5/18/20, “Here are 10 health and pharmaceutical companies playing a role in the fight to control the COVID-19 coronavirus. Stocks for each of these companies has the potential for considerable gain, whether it’s because they’re developing a treatment or their products are in greater need amid the outbreak.”
PPP for Income Investors: Payout Protection Picks by Lawrence C. Strauss at barrons.com published 6/12/20. “These eight companies should have the financial strength to keep their dividends intact — and raise them in some cases — during the coronavirus crisis.”
Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this Kiplinger/Barron’s collected group of fit stocks for our times are perfect for the dogcatcher process. Below are the September 3 data for 33 dividend stocks plus 32 no-pays.
The prices of two of the 33 dividend payers (listed by yield) fit stocks for our times made the possibility of owning productive dividend shares from this collection more viable for first-time investors. Those two are HRB and GSK. Both live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices.
To learn which of those two (if either) is the ‘safer’ dividend dog, click here after September 8th, and see the September fit stocks “safer” article in my dividend dogcatcher marketplace “safer” series.
Actionable Conclusions (1-10): Analysts Estimated 13.84% To 29.96% Net Gains For Ten Top Pandemic Fit Dividend Stocks To September 2021
Six of ten top fit for our times dividend 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 September dogs was graded by Wall St. Wizards was 60% accurate.
Projections were based on estimated dividends from $1000 invested in each of the highest yielding stocks plus their aggregate one-year analyst median target prices, as reported by YCharts. Note: one-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to September 3, 2021, were:
GlaxoSmithKline PLC (GSK) was projected to net $299.62, based on dividends, plus median target price estimates from six analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 36% less than the market as a whole.
AbbVie Inc. (ABBV) was projected to net $234.39, 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 24% under the market as a whole.
H&R Block (HRB) was projected to net $229.31 based on the median of target price estimates from nine analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 19% less than the market as a whole.
Gilead Sciences, Inc. (GILD) was projected to net $208.66, based on dividends, plus the median of target price estimates from thirty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% less than the market as a whole.
Diageo PLC (DEO) was projected to net $208.49, based on dividends, plus median target price estimates from seven analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 43% less than the market as a whole.
Lam Research Corp. (LRCX) was projected to net $178.45, based on the median of target price estimates from twenty-five analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% more than the market as a whole.
Philip Morris International (PM) was projected to net $164.73 based on dividends, plus the median of target estimates from nineteen brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 24% less than the market as a whole.
Roche Holding AG (OTCQX:RHHBY) was projected to net $159.47, based on the median of target estimates from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 69% less than the market as a whole.
eBay Inc. (EBAY) was projected to net $151.36, based on a median of target price estimates from thirty-four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 35% greater than the market as a whole.
Lockheed Martin Corp. (LMT) was projected to net $138.55, based on dividends, plus a median on the target price estimates from twenty analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% under the market as a whole.
The average net gain in dividend and price was estimated at 19.73% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 20% less than the market as a whole.
Actionable Conclusion (11): (Bear Alert) Analysts Predicted One Fit For Our Times Top Yield Dog To See An 8.57% Loss to September 2021
The probable losing trade revealed by Y-Charts to 2021 was:
Hormel Foods Corp. (HRL) projected a loss of $85.74 based on dividend and a median of the target price estimates from twelve analysts including broker fees. The Beta number showed this estimate subject to risks 4% opposite 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.”
50 Fit Stocks For Our Times Per September Target Gains
33 Fit Stocks For Our Times Per September Yield
Actionable Conclusions (11-20): Ten Top Fit Stocks For Our Times By Yield
Top ten Fit Stocks For Our Pandemic Times represented three of eleven Morningstar sectors. First place went to the lone consumer cyclical representative, H&R Block, Inc. .
Second, and sixth through tenth places, were claimed by six consumer defensive sector representatives, Philip Morris International Inc. , Diageo PLC , Unilever PLC (UL) , General Mills, Inc. (GIS) , PepsiCo, Inc. (PEP) , and Kimberly-Clark Corp. (KMB) .
Finally, three healthcare stocks occupied third through fifth places: AbbVie Inc. , GlaxoSmithKline , Gilead Sciences, Inc. , to complete the Fit Stocks For Our Times top ten by yield for September.
Actionable Conclusions: (21-30) Top Ten Fit Stocks For Our Times Showed 11.57-26.12% Upsides While (31) Four Lowly Downsiders Ranged 0.11% to -9.39% In September
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 An 8.84% Advantage For 5 Highest Yield, Lowest Priced of 10 Fit Stocks For Our Times To September 2021
Ten top Fit Stocks For Our Times were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.
As noted above, top ten Fit Stocks For Our Times stocks screened 9/3/20, showing the highest dividend yields, represented three of eleven in the Morningstar sector scheme.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Fit Stocks For Our Times (32) Delivering 17.54% Vs. (33) 16.11% Net Gains by All Ten Come September 2021
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Fit Stocks For Our Times kennel by yield were predicted by analyst 1-year targets to deliver 8.84% more gain than $5,000 invested as $.5k in all ten. The second lowest-priced selection, GlaxoSmithKline PLC, was projected to deliver the best net gain of 29.96%.
The five lowest-priced top-yield Fit Stocks For Our Times as of September 3 were: H&R Block Inc.; GlaxoSmithKline PLC; Unilever PLC; General Mills, Inc.; Gilead Sciences, Inc., with prices ranging from $15.04 to $65.91.
Five higher-priced Fit Stocks For Our Times as of September 3 were: Philip Morris International Inc.; AbbVie Inc.; Diageo PLC; PepsiCo, Inc.; Kimberly-Clark Corp., whose prices ranged from $79.32 to $152.25.
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 80% accurate on the direction of change and just 0% to 20% 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.
This article features the 33 Fit Dividend Stocks for Our Times. Doing that, nearly half the original list of companies is neglected. Therefore, below is the complete list of 65 stocks listed alphabetically by ticker symbol.
Sources: Kiplinger.com, Barrons.com, YCharts.com
Stocks listed above were suggested only as possible reference points for your Fit Stocks For Our Times 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 Thomson/First Call in YahooFinance. Dog photo: pxhere.com
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: 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.
Originally published on Seeking Alpha