Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities To Net 16.38% to 114.93% Gains By October 2021
Three of the ten top-yield MoPay stocks (shaded in the chart below) were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices. Thus, the Dogcatcher yield-based strategy for this MoPay group, as graded by broker estimates this month, proved 30% accurate.
Projections based on estimated dividend amounts from $1,000 invested in each of the 10 highest-yielding stocks and analyst median one-year target prices for those stocks, as reported by YCharts, produced the data points. Note: Target prices from single analysts were not applied (n/a). Ten probable profit-generating trades to October 2021 were:
Source: YCharts
Oxford Square Capital Corp. (OXSQ) netted $1,149.33, based on dividends, plus the median of target prices estimated by two analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 118% more than the market as a whole.
American Finance Trust (AFIN) netted $621.88, based on dividends, plus the median of annual price estimates from three analysts, less broker fees. A Beta number was not available for AFIN.
Solar Senior Capital Ltd (SUNS) netted $323.86, based on the median of target estimates from three analysts, plus estimated annual dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 34% over the market as a whole.
Gladstone Commercial Corp (GOOD) netted $284.18 based on the median of target price estimates from six analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% under the market as a whole.
PennantPark Floating Rate Capital Ltd (PFLT) was forecast to net $259.55, based on a median of target price estimates from six analysts, plus estimated annual dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 79% more than the market as a whole.
Pembina Pipeline Corp (PBA) netted $241.49 based on the median of target estimates from 22 analysts, plus estimated annual dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 34% over the market as a whole.
Dynex Capital Inc (DX) netted $211.02, based on dividends plus the median of annual price estimates from four analysts less broker fees. The Beta number showed this estimate subject to risk/volatility 31% more than the market as a whole.
Ellington Financial Inc (EFC) netted $188.11, based on the median of annual price estimates from seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 108% more than the market as a whole.
Sabine Royalty Trust (SBR) netted $181.19, based on a median of target price estimates from two analysts plus dividends. less broker fees. The Beta number showed this estimate subject to risk/volatility 39% less than the market as a whole.
AGNC Investment Corp. (AGNC) netted $163.80, based on a median of target price estimates from 12 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% less than the market as a whole.
Average net gain in dividend and price was 36.24% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 26% more than the market as a whole.
Source: Pixabay.com
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 specifically, these are in fact best called "underdogs".
October Monthly Pay Dividend Data
Three lists produced numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, September 29 closing prices and estimated annual dividends were referenced from YCharts. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) a high yield (and higher risk) MoPay CEICs/ETFs/ETNs list.
Monthly Pay Dividend Qualities
Quarterly, Semi-Annual and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.
Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.
This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Numerous prominent MoPay firms declared dividend cuts between December 2016 and May 2020. Those reducing or curtailing dividends in May and June 2020 included: Oxford Square Capital Corp, Partners Real Estate Investment Trust, Orchid Island Capital Inc (ORC), Cross Timbers Royalty Trust (CRT), H&R Real Estate Investment Trust (OTCPK:HRUFF), BTB Real Estate Investment Trust (OTC:BTBIF), American Finance Trust Inc, Mesa Royalty Trust (MTR), Solar Senior Capital Ltd, Ellington Financial Inc, Dividend Select 15 Corp (OTCPK:DVVDF), Chesswood Group Ltd (OTCPK:CHWWF); Sabine Royalty Trust, TORC Oil & Gas Ltd (VREYF), Freehold Royalties Ltd (OTCPK:FRHLF), ARC Resources Ltd (OTCPK:AETUF), Inter Pipeline Ltd (IPPLF), San Juan Basin Royalty Trust (SJT), and Ag Growth International Inc (OTCPK:AGGZF).
Former MoPay top 10 regular by yield. Bluerock Residential (BRG) announced in December it is retreating to quarterly dividend payments "in keeping with industry tradition." That tradition continued with Armour Residential REIT (ARR) and Stellus Capital Investment Corp. (SCM) both transitioning to QPay in June 2020. Stellus stuck with its QPay status, but ARR has returned to Mo Pay.
Capitala Finance Corp (CPTA) cut its monthly payout from $0.13 to $0.0833 as of October 30, 2017, then suspended it as of May 3, 2020. Oxford Square Capital however issued this nebulous statement regarding its pending monthly payments: "While no decision has yet been made with regard to the Company’s common stock distributions for July, August and September, we believe that the Company’s Board of Directors will likely elect to reduce or suspend the Company’s distributions for those months." On June 2, the company declared $0.035 monthly distributions for July August and September.
Top yield stock for July, Orchid Island Capital, released this cautionary note with its monthly dividend announcements: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back-up their words with actions cutting the dividend from $0.14 to $0.11 in February, to $0.09 in March, to $0.08 in September 2018, and to $0.055 for May 2020.
The U.S. exchange MoPay segment is volatile, transitive, and recovering. More trades in monthly pay equities are available from Canadian firms, many of which are listed on U.S. OTC exchanges. This month's active listing of MoPays is back to 70 from 64 in September, but not yet at full strength compared to 75 in May/June.
List One
70 U.S. Exchange Traded Monthly Pay Dividend Equities by Yield
Source: YCharts
Top 10 of these U.S. exchange listed monthly pay dividend equities showing the best yields for October represented two of the eleven Morningstar market sectors, with representative firms split 5 and 5 between the financial services and real estate sectors.
First place went to the first of five financial services sector representatives, Great Elm Capital Corp (GECC) [1]. The remaining four financials placed second, fourth, sixth and tenth: Oxford Square Capital Corp [2], Prospect Capital Corp (PSEC) [4], PennantPark Floating Rate Capital Ltd [6], and Gladstone Capital Corp (GLAD) [10].
Finally, real estate equities took the third, fifth, and, seventh, through ninth slots: Orchid Island Capital Inc [3], American Finance Trust Inc [5], ARMOUR Residential REIT Inc [7], BTB Real Estate Investment Trust [8], and Bridgemarq Real Estate Services Inc (OTCPK:BREUF) [9], to complete the October MoPay top ten list by yield.
List Two
Monthly Pay Dividend Equities by Price Upside
The results shown below from YCharts for MoPay dividend stocks as of market closing price September 29 were compared with the median of analyst target prices one year out. The 10 top stocks displayed 7.04% to 99.2% price upsides for the next year based on analyst one-year targets.
Source: YCharts
Three (tinted) of ten on this price upside list were members of the top 10 list by yield. The first five places on this upside list went to: Oxford Square Capital Corp [1], American Finance Trust Inc [2], Solar Senior Capital Ltd [3], Gladstone Commercial Corp [4], and Pembina Pipeline Corp [5].
The lower level five were PennantPark Floating Rate Capital Ltd [6], Dynex Capital Inc [7], Ellington Financial Inc [8], Sabine Royalty Trust [9], and AGNC Investment Corp [10].
Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.
Those 10 MoPay stocks showing the highest upside price potential into 2020 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
List Three
Monthly Pay Dividend Closed-End Investment Companies, Exchange-Traded Funds and Notes by Yield
Eighty top monthly dividend paying (MoPay) closed-end funds, exchange-traded funds and notes listed below were culled from nearly 800 candidates. Yields of 12.8% or greater calculated as of September 1 determined the top 10.
Source: YCharts
The top 10 monthly paying dividend investment companies, funds, and notes showing the biggest yields for per YCharts and Yahoo Finance data featured two open-ended investment companies (ETFs), one uncollateralized debt instrument (ETN), and seven closed-ended investment company (CEICs).
Source: YCharts
Two open-ended investment companies placed first and tenth: InfraCap MLP ETF (AMZA) [1], and Invesco KBW High Dividend Yld Fincl ETF (KBWD)[10].
One Uncollateralized debt instrument placed third: Credit Suisse X-Links Silver Covered Call ETN (SLVO) [3].
Finally, seven closed end investment companies (CEICs) placed second, fourth and sixth to ninth, Highland Global Allocation Fund (HGLB) [2], Aberdeen Income Credit Strategies Fund (ACP) [4], Tortoise Power & Energy Infrastructure (TPZ) [5], RiverNorth Marketplace Lending Corp (RSF) [6], XAI Octagon FR & Alt Income Term Trust (XFLT) [7], Eagle Point Credit Co LLC (ECC) [8], and PIMCO Dynamic Credit and Mortgage Inc (PCI) [9] to complete the top 10 exchange-traded notes, exchange-traded funds, and closed-end investment companies list for October 2020.
Compare Equity To Fund Performance
Source: YCharts
Note that the top 10 equity dividends are now priced 1% lower than those of the top 10 funds. In August and September, they were 1% higher. Those past two months were the first time equities showed prices higher than funds in over a year. Equities were equal to the funds in July, 1% lower in June, 3% lower in March, April and early May. They were 2% apart in December and November 2019 but in October, they were 1% less. For September 2019, equities were 2% under funds, but last August, they were equal. The differences are likely found in management fees collected in the fund world and the price of risk/volatility.
Background and Actionable Conclusions
Since June 2012, reader suggestions to include funds, trusts, and partnerships, a list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high yield collection from here. That list was supplemented by an upside potential article in October and a upside vs. buy and hold in November. Another list factored December 2012 reader comments.
Now we have a new year and decade of 2020 beginning in January, and continuing in February, March, April, early May, and mid May, June, July, August, September, and now October to compare and contrast MoPay equity upside potential to the yield (and higher risk/volatility) should one attempt to buy and hold exchange-traded funds and notes.
Yield Metrics Found A 13.72% Advantage In The Five Lowest Priced Of Ten High-Yield MoPay Equities
Source: YCharts
Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and Yahoo Finance, produced the following charts.
Actionable Conclusions: Analysts Estimated Five Lowest-Priced of Top 10 High-Yield MoPay Dividend Stocks (11) Would Produce 32.02% Vs. (12) 28.15% Net Gains from All 10 by October 2021
Source: YCharts
$5,000 invested as $1k in each of the five Lowest priced stocks in the top 10 MoPay dividend dog kennel by yield were predicted by analyst one-year targets to deliver 13.72% more net gain than $5,000 invested as $.5k in all 10. The second lowest-priced MoPay dividend dog, Oxford Square Capital Corp, was predicted to deliver the best net gain of 114.93%.
Source: YCharts
Lowest priced five MoPay dividend stocks estimated as of September 29 were: BTB Real Estate Investment Trust, Oxford Square Capital Corp, Great Elm Capital Corp, Prospect Capital Corp, and Orchid Island Capital Inc, with prices ranging from $2.11 to $5.05.
Higher priced five MoPay dividend equities estimated as of September 29 were: American Finance Trust Inc, Gladstone Capital Corp, PennantPark Floating Rate Capital Ltd, ARMOUR Residential REIT Inc, and Bridgemarq Real Estate Services Inc, whose prices ranged from $6.22 to $9.57.
This distinction between five low-priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, may someday be usable to find rewarding dogs in the MoPay kennel.
The added scale of projected gains based on analyst targets contributed 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. It is also the work analysts got paid big bucks to do.
Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.
Gains/declines as reported do not factor in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
Stocks listed above were suggested only as decent starting points for your MoPay dividend stock purchase or sale research process. These were not recommendations.
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