This article is based on two Kiplinger investing articles aimed at retirees:
25 Stocks Every Retiree Should Own, by Charles Lewis Sizemore, CFA, published 7/2/18, featured a “group of retirement stocks that includes both pure income plays and growth companies, with a focus on very-long-term performance and durability.”
20 Quality Dividend Stocks, (yielding roughly 4% or higher), published 9/26/19,by Brian Bollinger, “…should fund at least 20 years of retirement, if not more. They have paid uninterrupted dividends for more than 20 consecutive years, appear to have secure payouts and have the potential to collectively grow… dividends to protect investors’ purchasing power.”
Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, these Kiplinger reliable dividend stocks for retirees are perfect for the dogcatcher process. Here is the July 29 data for the 40 stocks in the Kiplinger-documented collection.
The Ides of March plunge in the stock market took its toll but many of these retiree selections bounded back beyond broker targets. Some remain overbought. Three of the top thirty by yield exceed broker expectations, D, WELL, and LTC. One other suspended dividends, DIS, while AMZN never has declared a dividend.
However, the mid-March drop in prices by 18 of the top 40 (listed by yield) most reliable stocks for retirees made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
The following 15 (as of July 29) have continued to live up to the Dogcatcher ideal of having annual dividends from a $1K investment exceed their single share prices: OKE; MMP; EPD; XOM; PBA; ENB; KMI; T; LTC; NNN; IP; TD; DOC; EBF; MNR. Some regard this condition as a buy signal.
To learn which of these fifteen are ‘safer’ dividend dogs, click here after August 4 and read my Dividend Dogcatcher follow-up marketpiece, ‘Safer’ Kiplinger Reliable Dividend Stocks for Retirees in the Seeking Alpha Marketplace.
Actionable Conclusions (1-10): Analysts Estimated 18.02% To 52.05% Net Gains For Ten Top Kiplinger Reliable Retirement Dogs To August 2021
Eight of ten top Kiplinger most reliable retirement 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 August dogs was graded by Wall St. Wizards as 80% 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: target prices by lone-analysts were not applied. Ten probable profit-generating trades projected to August 1, 2021 were:
Urstadt Biddle Properties (UBA) was projected to net $520.45 based on dividends, plus the median of target estimates from four brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 18% less than the market as a whole.
Enterprise Products Partners LP (EPD) was projected to net $446.18, based on dividends, plus the median of target price estimates from twenty-five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% more than the market as a whole.
Pembina Pipeline Corp. (PBA) was projected to net $346.96 based on the median of target price estimates from twenty analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% more than the market as a whole.
Magellan Midstream Partners (MMP) was projected to net $322.19, based on dividends, plus median target price estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% greater than the market as a whole.
Kinder Morgan Inc. (KMI) was projected to net $284.60, based on dividends, plus the median of target price estimates from twenty-six analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 4% over the market as a whole.
ONEOK Inc. (OKE) was projected to net $266.54, based on the median of target estimates from twenty-five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 119% over the market as a whole.
CVS Health Corp. (CVS) was projected to net $259.03, based on dividends, plus the median of target price estimates from twenty-eight analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 24% less than the market as a whole.
Enbridge Inc (ENB) was projected to net $247.32, based on dividends, plus the median of the target price estimates from twenty-nine analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% under the market as a whole.
Exxon Mobil Corp. (XOM) was projected to net $180.29, based on a median of target price estimates from twenty-five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 33% more than the market as a whole.
AT&T Inc. (T) was projected to net $180.16, based on the median of target price estimates from thirty analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% less than the market as a whole.
The average net gain in dividend and price was estimated at 30.09% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 15% greater 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”.
40 Kiplinger Reliable Retirement Stocks Per August Target Gains
40 Kiplinger Reliable Retirement Stocks Per August Yield
Actionable Conclusions (11-20): 10 Top Kiplinger Reliable Retirement Stocks By Yield For August
Top ten Kiplinger July Reliable Retirement stocks represented three of eleven Morningstar sectors. Seven energy stocks occupied first through seventh places: ONEOK Inc. , Magellan Midstream Partners LP , Enterprise Products Partners LP , Exxon Mobil Corp. , Pembina Pipeline Corp. , Enbridge Inc. , and Kinder Morgan Inc. .
Eighth place went to a single communication services representative, AT&T Inc. . Finally, ninth, and tenth places were claimed by two real estate sector representatives, W. P. Carey Inc. (WPC) , and LTC Properties Inc. (LTC) , to complete the Kiplinger reliable retirement top ten by yield for August.
Actionable Conclusions: (21-30) Top Ten Kiplinger Reliable Retirement Dogs Showed 11.13%-50.29% Upsides While (31) Three Lowly Down-siders Came Out For August
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 A 30.57% Advantage For The 5 Highest Yield, Lowest Priced Of Top Ten Kiplinger Reliable Retirement Stocks To August 2021
Ten top Kiplinger reliable retirement dogs were culled by yield for this update. Yield (dividend / price) results provided by YCharts did the ranking.
As noted above, top ten Kiplinger reliable retirement dogs screened 7/29/20 showing the highest dividend yields represented four of eleven in the Morningstar sector scheme.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Kiplinger Featured Retirement Dogs (32) Delivering 29.59% Vs. (33 ) 22.66% Net Gains by All Ten Come August 2021
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Kiplinger reliable retirement kennel by yield were predicted by analyst 1-year targets to deliver 30.57% more gain than $5,000 invested as $.5k in all ten. The second lowest priced selection, Enbridge Inc., was projected to deliver the best net gain of 40.12%.
The five lowest-priced top-yield Kiplinger most-reliable retiree dividend dogs as of July 29 were: Kinder Morgan Inc.; Enterprise Products Partners LP; Pembina Pipeline Corp.; AT&T Inc.; ONEOK Inc., with prices ranging from $14.53 to $29.72.
Five higher-priced Kiplinger top yield most reliable retirement dividend dogs as of July 29 were: Enbridge Inc.; LTC Properties Inc.; Magellan Midstream Partners LP; Exxon Mobil Corp.; W. P. Carey Inc., whose prices ranged from $32.64 to $70.80.
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.
If somehow you missed the suggestion of the fifteen stocks ripe for picking at the start of this article, here is a reprise of the list at the end:
The following five from the Kiplinger reliable dividend stocks for retirees (as of 7/29/20) realized the ideal of offering annual dividends from a $1K investment exceeding their single share prices: OKE; MMP; EPD; XOM; PBA; ENB; KMI; T; LTC; NNN; IP; TD; DOC; EBF; MNR. Some regard this condition as a buy signal.
Stocks listed above were suggested only as possible reference points for your Retirement stock 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: consumerreports.org
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Disclosure: I am/we are long T. 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.