2 Ideal Barron’s/Fortune New-Year 2024 Dividend Buys

Foreword

This article is based on three November to January Barron’s Weekly and one Fortune Bi-Monthly articles aimed at revealing 46 select stocks for the New Year 2024. Those four articles were:

Barron’s Roundtable Pros 8 Stocks for 2024

Interest rates will come down, but (Barron’s) panelists don’t see another magnificent year for stocks. Eight picks to beat the odds.

With a few exceptions, the members of the 2024 Barron’s Roundtable expect the stock market to disappoint, with the index delivering returns of minus-5% to plus-5% for the full year. No, they don’t see a ruinous recession, and yes, they expect the Federal Reserve to lower interest rates at some point during the year. Their main worry is that stocks are too richly valued, leaving little margin for error.

Roundtable Panelists

Barron’s 2024 Roundtable panelists:

Todd Ahlsten – CIO and lead portfolio manager, Parnassus Core Equity fund, Parnassus Investments, San Francisco

Scott Black – Founder and president, Delphi Management, Boston

Abby Joseph Cohen – Professor of Business, Graduate School of Business, Columbia University, New York

Sonal Desai – CIO and portfolio manager, Franklin Templeton Fixed Income, San Mateo, California

Henry Ellenbogen – CIO and managing partner, Durable Capital Partners, Chevy Chase, Md.

Mario Gabelli – Chairman and CEO, Gabelli Funds, Greenwich, Conn.

David Giroux – CIO, T. Rowe Price Investment Management and portfolio manager, Capital Appreciation fund, T. Rowe Price, Baltimore

Rajiv Jain – Chairman and CIO, GQG Partners, Fort Lauderdale, Fla.

John W. Rogers Jr. – Founder, chairman, co-CEO, and CIO, Ariel Investments, Chicago

William Priest – Executive chairman and co-CIO, Epoch Investment Partners, New York

Meryl Witmer – General partner, Eagle Capital Partners, New York

Barron’s 15 New Year Mentions for 2024

Todd Ahlsten:

We are looking for earnings to grow by at least 10% in 2024, and more than half that growth will probably come from the Magnificent Seven (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla). There are massive waves of capital investment going on in the economy, in AI, cloud computing, and elsewhere. Lisa Su, the CEO of Advanced Micro Devices, is talking about a $400 billion accelerator GPU [graphics processing unit] market by 2027. Life-sciences companies and players like Intuit, Microsoft, Adobe, Amazon, and Google are all going to put capital behind AI.

Rajiv Jain:

Unilever is barely getting 2%-3% volume growth in some of its bigger emerging markets. The largest banks in these countries are far better than European banks. Several banks in Brazil have $30 billion or higher market capitalizations, comparable to Europe, but with much higher return on equity.

Henry Ellenbogen:

AI drove most of the S&P’s gains. Duolingo, one of my 2023 picks, is a microcosm of what can be done with AI. Certain companies, like Uber Technologies, wouldn’t exist without mobile technology, but it also benefited traditional businesses like Domino’s Pizza. Cloud computing benefited the insurgents.

John W. Rogers Jr:

The market’s performance has been bifurcated. On one side are large-cap growth stocks, and on the other small-cap value. According to JPMorgan Chase, the 20-year average P/E multiple of the large-cap growth index is 18.9. Recently, it was 26.5. The 20-year average P/E for small-cap value is 16.7. Today it is 16.3

Barron’s 10 Favorite Stocks for 2024

Good companies at attractive prices could be winners in the new year. Our list for 2024 includes a diversified mix of familiar stocks and some surprises, once again leaning toward, but not exclusively to, the value camp: Alibaba Group Holding, Alphabet, Barrick Gold, Berkshire Hathaway, BioNTech, Chevron, Hertz Global Holdings, Madison Square Garden Sports, PepsiCo, and U-Haul Holding.

Fortune 13 inflation-proof stocks for 2024

BY WILL DANIEL AND SCOTT DECARLO, November 28, 2023 at 6:00 AM EST

Fortune asked seven of Wall Street’s most well-respected investors and analysts for their top stock picks for 2024. The diverse mix of companies they mentioned range from sturdy, predictable consumer-staples plays to bets on a new technological revolution. In a time of uncertainty, these picks should provide a mix of safety and opportunity, no matter what happens in the broader economy.

Any collection of stocks is more clearly understood when subjected to this yield-based (dog catcher) analysis, these Barron’s/Fortune New-Year 2023 Tips are perfect for the dogcatcher process.

Here is the January 17 updated YCharts data for 26 dividend paying stocks of 42 screened and the 2 living up to the dogcatcher ‘ideal’ in this collection. These made-up the Barron’s/Fortune New-Year 2024 Tips collection.

The Ides of March 2020 plunge in the stock market took its toll on stocks over three and three-quarter years ago. However, the sudden recovery in prices after the plunge by dividend stocks made the possibility of owning productive dividend shares from any collection more remote for first-time investors.

January 2024 showed a glimmer of light from two stocks emerging as dogcatcher ideal candidates. They were: Kinder Morgan, Inc. (KMI); and Barrick Gold (GOLD). Their prices respectively settled at $46.84 and $10.14 below the annual dividend payout from a $1K investment.

Actionable Conclusions (1-10): Brokers Estimated Top-Ten Barron’s/Fortune New-Year 2024 Tips Might Net 14.17% to 70.19% Gains By January 2025

Six of the tops-by-yield ten Barron’s/Fortune New Year 2024 Tips (tinted in the chart below) were also the top gainers for the coming year based on analyst 1-year targets. Thus, the top yield dog strategy for this group, as graded by analyst estimates for this month, proved 60% accurate.

Estimated dividend-returns from $1,000 invested in each of the highest-yielding stocks and their aggregate one-year analyst median-target prices, as reported by YCharts, created the 2024-25 data points. However, one year target-prices by lone analysts were not counted. The resulting ten probable best profit-generating 2024 Barron’s/Fortune New-Year Tips projected to January 17, 2025, by that reckoning, were:

Alibaba Group Holding (BABA) netted $701.87 based on the median of target estimates from 42 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% less than the market as a whole.

Exxon Mobil Corp. (XOM) netted $315.03 based on the median of target estimates from 24 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 3% less than the market as a whole.

Chevron Corp. (CVX) netted $273.12 based on the median of target estimates from 24 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% greater than the market as a whole.

Kinder Morgan, Inc. netted $227.52 based on the median of target prices estimated by 18 analysts, plus estimated dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% less than the market as a whole.

Barrick Gold Corp. netted $203.30 based on estimates from 2 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 12% greater than the market as a whole.

NVIDIA Corp. (NVDA) netted $177.39 based on the median of target price estimates from 47 analysts plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 64% greater than the market as a whole.

Oracle Corp. (ORCL) netted $171.02 based on the median of target estimates from 30 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 3% over the market as a whole.

JPMorgan Chase & Co. (JPM) netted $147.42 based on the median of target estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 13% greater than the market as a whole.

PepsiCo, Inc. (PEP) netted $146.83 based on dividends plus a median target price estimate from 22 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% less than the market as a whole.

Wintrust Financial Corp. (WTFC) netted $141.69 based on estimates from 17 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% less than the market as a whole.

The average net-gain in dividend and price was 25.05% on $10k invested as $1k in each of these ten 2024 Barron’s/Fortune New-Year Tips. This gain estimate was subject to average risk/volatility 3% greater than the market as a whole.

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. Thus, the highest yielding stocks in any collection became known as “dogs.” More specifically, these are, in fact, best called, “underdogs”.

Top 42 Barron’s/Fortune New-Year 2024 Tips By Broker 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 42 Barron’s/Fortune Mid-Year 2024 Tips By Yield

Actionable Conclusions (11-20): Ten Top Stocks By Yield Are Barron’s/Fortune New-Year 2024 Tips Dividend Dogs

Top ten stocks selected 1/17/24 by yield represented six of eleven Morningstar sectors.

First place was secured by the first of three energy sector members, Kinder Morgan, Inc. The other two placed third and fourth, Chevron and Exxon Mobil. One real estate representative placed second, Boston Properties, Inc. (BXP).

Then, three consumer defensive members placed fifth, sixth and tenth, Unilever PLC (UL) [5], PepsiCo Inc [6], and Procter & Gamble (PG) [10].

The lone healthcare concern placed seventh, Johnson & Johnson (JNJ) [7]. Then one basic materials company placed eighth, Barrick Gold Corp [8].

In ninth place was the lone financial services representative, JPMorgan Chase & Co. (JPM) [9], which completed the top ten Barron’s/Fortune New-Year 2024 Tips Dividend Dogs for January.

Actionable Conclusions: (21-30) Ten Barron’s Mid-Year 2023 Watchlist Stocks Showed 15.08% to 30.07% Upsides To July, 2024, With (31) One -0.71% Loser

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 10.77% Advantage For 5 Highest Yield, Lowest Priced of Top-Ten Barron’s Mid-Year 2023 Watchlist Stocks To July, 2024

Ten top Barron’s/Fortune New-Year 2024 Tips were culled by yield for this monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top-ten Barron’s/Fortune New-Year 2024 Tips selected 1/17/24, showing the highest dividend yields, represented six of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Estimated The 5 Lowest-Priced Of Ten Highest-Yield Barron’s Mid-Year 2023 Watchlist Stocks (33) Delivering 13.17% Vs. (34) 11.89% Net Gains by All Ten by July, 2024

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Barron’s/Fortune New-Year 2024 Tips by yield were predicted by analyst 1-year targets to deliver 22.39% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced Barron’s/Fortune New-Year 2024 Watchlist Tip, Barrick Gold Corp., was projected to deliver the best net gain of 43.6%.

The five lowest-priced top-yield Barron’s New-Year 2024 Tips for January 17 were: Barrick Gold Corp; Kinder Morgan Inc; Unilever PLC; Boston Properties Inc; Exxon Mobil Corp, with prices ranging from $15.56 to $96.98

The five higher-priced top-yield Barron’s/Fortune New-Year 2024 Tips for January 17 were: Chevron Corp; Procter & Gamble Co; Johnson & Johnson; PepsiCo Inc; JPMorgan Chase & Co, whose prices ranged from $143.12 to $167.09.

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 nineteen stocks ripe for picking at the start of the article, here is a repeat of the list at the end:

In the current market advance, dividends from $1K invested in the two stocks listed above met or exceeded their single share prices as of 1/17/24.

As we are over nine months past the third anniversary of the 2020 Ides of March dip, the time to snap up those two top yield Barron’s/Fortune New-Year 202r Tips 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 Fair Top Ten Barron’s/Fortune New-Year 2024 Tip Prices

Since two of the top-ten Barron’s/Fortune New-Year 2024 Watchlist shares are priced less than the annual dividends paid out from a $1K investment, the following top chart shows the dollar and percentage shift required for eight at recent prices to achieve fair pricing for all ten. The recent prices are documented in the middle chart and the fair prices are revealed in the bottom chart.

The top chart is an indicator of how low the eight non-ideal stocks must adjust to become fair-priced. Which means conforming to the standard of dividends from $1K invested exceeding the current single share price.

All 46 Barron’s/Fortune New-Year 2024 Tip Stocks by

Source Articles

The analysis above focuses primarily on the top yield 30 Barron’s/Fortune New-Year 2024 Watchlist selections. Below is the list of all the stocks including duplicate listings, by alphabetically by ticker symbol alphabetically.

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 Barron’s Mid-Year 2023 Watchlist stock 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; Yahoo Finance – Stock Market Live, Quotes, Business & Finance News; analyst mean target price by YCharts. Dog Photo by Farzan Lelinwalla on Unsplash.