54 Ideal Value Dogs For February

Foreword

About Large Cap Value

A Value ranking for large-cap stocks from YCharts puts together complementary strategies found during their stock research. As a value ranking, it looks at the price of a stock relative to a number of measurements that determine intrinsic firm value. Only the largest 10% of companies based on market cap are allowed in this portfolio.

What it is: The Value Score is a composite score. It tells you how much you are getting in terms of profits, cash flows, assets, sales, etc. for the stock price that you pay. It is a relative measurement, so it says nothing about the overall level of the market. Rather, it answers the question: “Given the current market level, which stocks give you the most current value for your dollar of investment?” Tens are the most value, and 1s are the least.

How to use it: Use it to find companies that are selling at a low price relative to their assets and profits.

Limitations of the Value Score: Watch out for companies with a lot of uncertainty or bad prospects for the future (e.g., Pharma companies with expiring patents, industries on the decline, etc.).

About the Ben Graham Formula

The Ben Graham Formula strategy contains ultra-stable stocks that will infrequently lose money if held over a long period of time. It was developed based on a screen in Graham’s book, “The Intelligent Investor.” For those who have the book, it is the “Defensive Investor” screen. It selects stocks that are large in terms of sales and total assets, have a strong track record of earnings and dividend payments, have a reasonable current ratio and level of long-term debt, and have a low valuation given by P/E Ratios and Price to Book Value ratios. – YCharts.

While 15 out of this collection of 69 All-Star-Value Dividend stocks are too pricey to justify their skinny dividends, the remaining 54 of them, by yield, live up to the ideal of offering annual dividends (from a $1K investment) exceeding their price per share.

54 Ideal Value Dogs for February

In the current market, the dividends from $1k investments in 54 of the 69 stocks listed above, met or exceeded their single share prices as of 2/14/24.

As we are now near the fourth anniversary of the 2020 Ides of March dip, the time to snap up some of the 54 top-yield All-Star-Value dogs is now… unless another big bearish drop in price looms ahead. (At which time, your strategy could be to add to your position in any of these you then hold.)

Actionable Conclusions (1-10): Analysts Estimate 28.42% To 83.46% Top Ten All-Star-Value Net Gains To February 2024

Three of the ten top-picks by yield were verified as also being 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, this yield-based forecast for All-Star-Value derived dividend dogs (as graded by Brokers) was 30% accurate.

Estimated dividend-returns from $1000 invested in each of the highest-yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, created these 2024-25 data-points. (Note: target prices by lone-analysts were not used.) Ten probable profit-generating trades projected to February, 2025 were:

Sociedad Quimica y Minera de Chile S.A. (SQM) was projected to net $834.60, based on the median of target price estimates from 18 analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate is subject to risk/volatility 3% greater than the market as a whole.

Solaris Oilfield Infrastructure, Inc. (SOI) was projected to net $503.69, based on the median of target price estimates from 4 analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% greater than the market as a whole.

Vale S.A. (VALE) netted $436.44 based on the median of target price estimates from 23 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility equal to the market as a whole.

Energy Transfer LP (ET) was projected to net $354.199, based on dividends, plus the median of target price estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 65% greater than the market as a whole.

Cementos Pacasmayo S.A.A. (CPAC) was projected to net $345.60, based on dividends, plus the median of target price estimates from 4 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% less than the market as a whole.

Devon Energy Corporation (DVN) was projected to net $337.928, based on dividends, plus the median of target price estimates from 28 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 120% greater than the market as a whole.

Medifast, Inc. (MED) was projected to net $301.71, based on a median of target estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 23% greater than the market as a whole.

Kinder Morgan, Inc. (KMI) was projected to net $301.41, based on dividends, plus the median of target price estimates from 18 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% less than the market as a whole.

Enbridge Inc. (ENB) was projected to net $291.82 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 13% less than the market as a whole.

HSBC Holdings plc (HSBC) was projected to net $284.18, 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 35% under the market as a whole.

The average net-gain in dividend and price was estimated to be 39.92% on $10k invested as $1k in each of these ten stocks. The average Beta showed these estimates subject to risk/volatility 14% 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.”

Top 50 All-Star-Value Picks By Broker 1Yr Price Targets

This scale of broker-estimated upside (or downside) for stock prices provides a scale of market popularity. Note: no broker coverage or 1 broker coverage produced a zero score on the above scale. This scale can be taken as an emotional component as opposed to the strictly monetary and objective dividend/price yield-driven report below. As noted above, these scores may also be taken as contrarian.

Top 50 All-Star-Value Picks By Annual Dividend Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The February Dogs of The All-Star-Value Pack

Top ten All-Star-Value stocks selected 2/14/23 by yield represented five of eleven Morningstar sectors. First place was secured by the first of four energy sector representatives, Euronav NV (EURN) [1]. Three more energy stocks placed second, third, and seventh: Petroleo Brasileiro S.A. Petrobras (PBR) [2]; TORM plc (TRMD) [3], and Dorian LPG Ltd. (LPG) [7].

Thereafter, the first of two financial services sector members placed fourth, FS KKR Capital Corp (FSK) [4]. The other placed ninth, Golub Capital BDC (GBDC) [9].

One consumer cyclical representative placed fifth, Medifast Inc. [5]. Then, two basic materials members placed sixth, and eighth, Sociedad Quimica y Minera de Chile S.A. [6], and Cementos Pacasmayo S.A.A. [8].

Finally, one consumer defensive sector representative placed tenth, Altria Group, Inc. (MO) [10], to complete this All-Star-Value top ten, by yield, for February.

Actionable Conclusions: (21-30) Ten All-Star-Value Dividend Stocks Showed 20.54% To 72.03% Upsides To February, 2025, With (31) No Losers

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 20.33% Advantage For 5 Highest Yield, Lowest Priced of Top-Ten All-Star-Value Dogs To January 2025

Ten top All-Star-Value stocks were culled by yield for this monthly update. Those (dividend/price) results provided by YCharts did the ranking.

As noted above, top-ten All-Star-Value Dogs selected 2/14/24, showing the highest dividend yields, represented five of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Ten Highest-Yield All-Star-Value Dividend Stocks (33) Delivering 22.52% Vs. (34) 28.96% Net Gains by All Ten by February, 2025

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten All-Star-Value dividend pack, by yield, were predicted by analyst 1-year targets to deliver 24.18% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced All-Star-Value top-yield stock, Cemento Pacasmayo SAA, was projected to deliver the best net gain of 34.56%.

The five lowest-priced top-yield All-Star-Value dividend stocks for February were: Cemento Pacasmayo SAA; Golub Capital BDC; Petroleo Brasileiro SA Petrobras; Euronav NV; FSK KKR Capital Corp., with prices ranging from $5.12 to $20.04

The five higher-priced top-yield All-February leaders were: TORM plc; Dorian LPG Ltd; Sociedad Quimica y Minera de Chile S.A.; Altria Group Inc; Medifast Inc, whose prices ranged from $33.91 to $52.68.

This 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 15% to 85% accurate on the direction of change and just 0% to 15% accurate on the degree of change.

Afterword

If somehow you missed the suggestion of the 54 stocks ripe for picking at the start of the article, here is a repeat of the list at the end:

54 Ideal Value Star Dogs

In the current market bounce, dividends from $1K invested in the fifty-six stocks listed above met or exceeded their single share prices as of 2/14/24

As we near four years since the 2020 Ides of March dip, the time to snap up some top-yield All-Star-Value dogs is now… unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your holdings.)

Recent vs. Break-Even Top-Ten All-Star-Value Stock Prices

Since all of the top-ten All-Star-Value Dividend shares are now priced less than the annual dividends paid out from a $1K investment, the following top chart shows the dollar and percent variants to all ten top dogs conforming to (but not exceeding) the dogcatcher ideal.

Those at recent prices are the subject of the middle chart, with the breakeven pricing of all ten delivered in the bottom chart.

You could look at the top chart as an indicator of how high each stock might rise in the coming year or two. However, it also shows how much the price could rise (in either dollars or percentages) before it exactly conforms to the standard of dividends from $1K invested equaling the current single share price.

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 All-Star-Value Dividend dog stock purchase or sale research process. These were not recommendations.

Open source dog art from dividenddogcatcher.com

Source data from: YCharts.com