While last month more than half this collection of broker-favored Fit Financial Service equities were too pricey to justify their skinny dividends, this month 147 live up to the ideal of having its annual dividends from a $1K investment exceed the single share price. This is a rebalance of the market in favor of the buy and hold buyer like you and me.
With renewed downside market pressure, it was possible for all 147 of these now lower-priced high-yield Fit Financial Service stocks to become fair-priced again with their annual yield meeting or exceeding their single share prices right now.
After the Ides of March dip, the time to make a wish list of stocks to buy is now. They may be heading lower!
To complete your analysis of this article click here to learn which have the “safer” dividends secured by cash flow yield in excess of dividend yield on my Seeking Alpha marketplace Dividend Dogcatcher pages.
Actionable Conclusions (1-10): Broker Targets Estimated 272.7% To 497.13% Net Gains For Ten Fit Financial Stocks By March 19, 2021
Seven of the ten top yield broker-favored Fit Financial Service equities were among the top ten gainers for the coming year (based on analyst one-year targets). So, this forecast , as graded by Wall St. Brokers, was 70% accurate.
Projections based on dividends from $1,000 invested in the highest-yielding stocks and aggregate one-year analyst median target prices of those stocks, as reported by YCharts, created the 2020 data points. Note: One-year target prices from single analysts were not applied (n/a). Ten projected profit-generating trades to March 19, 2021 were:
Ellington Financial Inc (EFC) was projected to net $2,190.66, based on estimated dividends, plus the median of target estimates from seven brokers, less broker fees. The Beta number showed this estimate subject to risk 51% less than the market as a whole.
Fidus Investment Corp (FDUS) was projected to net $1,565.23, based on dividends, plus the median of target estimates from seven brokers, less broker fees. The Beta number showed this estimate subject to risk equal to the market as a whole.
New Mountain Finance Corp (NMFC) netted $1,503.93, based on dividends, plus the median of target estimates from seven brokers, less broker fees. The Beta number showed this estimate subject to risk 42% less than the market as a whole.
Apollo Investment Corp (NASDAQ:AINV) was projected to net $1,445.05 based on dividends, plus the median of prices estimated by twelve analysts, less broker fees. The Beta number showed this estimate subject to risk 11% greater than the market as a whole.
BlackRock TCP Capital Corp (NASDAQ:TCPC) was projected to net $1,414.28, based on dividends, plus the median of target price estimates from eight analysts, less broker fees. The Beta number showed this estimate subject to risk 31% under the market as a whole.
Stellus Capital Investment Corp (SCM) was projected to net $1,251.10, based on the median of prices estimated by five analysts, plus dividends , less broker fees. The Beta number showed this estimate subject to risk 15% under the market as a whole.
TCG BDC inc (CGBD) was projected to net $1,241.47, based on the median of prices estimated by five analysts, plus dividends, less broker fees. A Beta number was not available for CGBD.
PacWest Bancorp (PACW) was projected to net $1,178.50, based on dividends plus the median of prices estimated by twelve analysts, less broker fees. The Beta number showed this estimate subject to risk 41% greater than the market as a whole.
Hercules Capital Inc (HTGC) was projected to net $1,176.16, based on dividends plus the median of prices estimated by eleven analysts, less broker fees. The Beta number showed this estimate subject to risk 14% less than the market as a whole.
Solar Capital Ltd (SLRC) was projected to net $1,159.63, based on dividends, plus the median of prices estimated by ten analysts, less broker fees. The Beta number showed this estimate subject to risk 30% greater than the market as a whole.
The average net gain in dividend and price was estimated at 141.26% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 8% less 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”.
50 Broker Price Target Upsides
50 Broker-Favored Fit Financial Service Top Dogs By Yield
Actionable Conclusions (11-20) Top Ten Broker-Favored Fit Financial Services Dog Yields Ranged 19.51%-27.57%
Top ten broker-favored Fit Financial Service dogs selected 3/19/20 by yield represented three of fifteen financial sector industries.
The first and ninth top ten broker-favored Fit Financial Service dogs represented the mortgage finance industry. They were: Ellington Financial , and Monroe Capital Corp (MRCC) .
The second place and majority of stocks on the ten by yield list were from the asset management industry. There were seven: Apollo Investment Corp ; Fidus Investment Corp ; New Mountain Finance Corp ; TCG BDC Inc ; BlackRock TCP Capital Corp ; Newtek Business Services Corp (NEWT) ; Stellus Capital Investment Corp .
Finally, one insurance-diversified representative firm placed fifth, Aviva PLC (OTCPK:AVVIY) , to complete the top ten broker-favored Fit Financial Service top ten for March 2020-21.
Actionable Conclusions: (21-30) Ten Broker-Favored Fit Financial Services Top Yield Stocks Showed 101.84% To 192.50% Upsides To March
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 Cast A 9.08% Advantage For Five Highest-Yield, Lowest-Priced Broker-Favored Fit Financial Services Dogs To March 2021
Ten top Broker-Favored Fit Financial Services dogs were culled by yield for this March update. Yield (dividend/price) results verified by YahooFinance did the ranking.
As noted above, top ten Broker-Favored Fit Financial Services dogs selected 3/19/20 showing the highest dividend yields represented three of fifteen industries in the Financial Sector scheme.
Actionable Conclusions: Analysts Estimated Five Lowest-Priced Top Ten Highest-Yield Broker-Favored Fit Financial Services Dogs (31) Delivering 137.67% Vs. (32) 126.21% Net Gains From All Ten By March 19 2021
$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten Broker-Favored Fit Financial Services dogs collection was predicted by analyst one-year targets to deliver 9.1% more net gain than $5,000 invested as $.5k in all ten. The third lowest priced, Ellington Financial Inc, was projected by analysts to deliver the best net gain of 219.07%.
The five lowest-priced top Broker-Favored Fit Financial Services dogs as of March 19 were: Aviva PLC, New MountainFinance Corp, Ellington Financial Inc, BlackRock TCP Capital Corp, and Fidus Investment Corp, with prices ranging from $5.05 to $6.78.
Five higher-priced Broker-Favored Fit Financial Services dogs from March 19 were: TCG BDC Inc, Stellus Capital Investment, Monroe Capital Corp, Apollo Investment Corp, and Newtek Business Services Corp, whose prices ranged from $6.92 to $10.26.
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.
Below is the listing of all 147 March broker-favored Fit Financial Service equities from YCharts as of 3/19/20. They are listed in broker preferred order from highest preference to lowest with no negatives.
Stocks listed above were suggested only as possible reference points for your broker-favored Fit Financial Service dividend dog purchase or sale research process. These were not recommendations.
Get The ‘Safer’ Dividend Fit Financial Service Story
Click here to subscribe to The Dividend Dogcatcher. Get more information and the follow-up to this article.
Catch A Dog On Facebook At 8:45 AM every NYSE trade day on Facebook/Dividend Dog Catcher, A Fredrik Arnold live video highlights a portfolio candidate in the Underdog Daily Dividend Show!
Root for the Underdog. Comment below on any stock ticker to make it eligible for my next FA follower report.
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.
In addition my YCharts data supplier makes no warrants regarding their forward looking dividend accuracy. Here is their dividend yield statement: “2) We allow a dividend yield to persist for 365 days after the most recent reported dividend if a dividend is cut. Hence, this data should not be used for backtesting purposes. For true historical testing purposes, one would need the date the company announced a cut or increase in the dividend to get the proper expected dividend yield as of a given date.”
“The forward yield won’t catch changes as there is not an automated method for turning those announcements into that kind of data. A specific use case would require additional over-site after the screening had taken place to catch these instances. I wish there was an easier way, and I will submit feedback, but as of yet this has been how we’ve always done things for lack of a better method. “
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. Dog photo: veterinarypracticenews.com