Of 12 Ideal Inflation-Busting April Dividend Dogs – Buy 3

Foreword

This article is based on five UBS, Kiplinger, and Barron’s articles, aimed at finding “Inflation Busting” stocks since 2022. The author believes these stock suggestions are prescient into the year 2024 as banks and crypto exchanges succumb to rising interest rates. The title and links to the articles follow:

24 Pricing Power Performers

“With inflation pressures surging, pricing power relative to cost exposures will be a key theme and source of [absolute outperformance] for global equity markets,” writes the UBS Equity Strategy team.—by: Dan Burrows April 14, 2022

7 REITS with Rising Dividends

REIT dividends are expected to post double-digit percentage growth this year, making the yield-friendly sector all the more attractive.—by: Lisa Springer April 13, 2022

10 Stocks for Rising Interest Rates

The Federal Reserve has signaled in no uncertain terms that interest rates will head higher in 2022. Here are 10 of the best stocks for this environment. —by: Jeff Reeves April 4, 2022

5 Stocks To Stave Off Sizzling Inflation

Income investors like utility stocks for their stability and generous dividends. Here are 12 top-rated ones to watch in the new year. —by: Dan Burrows February 10, 2022

6 Dividend Stocks Whip Inflation

The hot new investment theme isn’t socially nuanced crypto space finance or metaverse charging networks for virtual vehicles. It’s dividends—cash payments to shareholders.

To find more dividend growers, Barron’s used an approach inspired by the Federal Reserve’s so-called dot plot, or path of expected interest rate hikes. They screened the S&P 500 for companies that analysts predict will increase payments nicely in the years ahead. They came up with six. —By Jack Hough Updated April 24, 2022 / Original April 22, 2022

Any collection of stocks is more clearly understood when subjected to yield-based (dogcatcher) analysis. This collection of UBS, Kiplinger, and Barron’s articles, aimed at identifying “Inflation Busting” stocks is perfect for the dogcatcher process. Below are the April 10, 2023 “Inflation Busters” as parsed by YCharts.

The prices of 12 of these 48 UBS, Kiplinger, and Barron’s dividend selections made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 12 Dogcatcher Ideal “Inflation Busting” stocks for April are: Arbor Realty Trust, Inc. (ABR); Ares Capital (ARCC); PacWest Bancorp (PACW); BHP Group Ltd (BHP); AllianceBernstein Holding (AB); British American Tobacco p.l.c. (BTI); Hasbro, Inc. (HAS); Fifth Third Bancorp (FITB); VICI Properties Inc. (VICI); Navient Corp (NAVI); HP Inc. (HPQ); The AES Corporation (AES).

Those twelve all live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as “look closer to maybe buy” opportunity.

In a ranking of three-year price gains of the top 30 inflation busters by yield, three of the Ideal selections stood out: BHP Group, HP Inc., and The AES Corp.

Actionable Conclusions (1-10): Analysts Estimated 25.27% To 112.23% Net Gains For Ten Top ‘Inflation Busting’ Dividend Stocks To April 2024

Seven of ten top “Inflation Buster” dividend stocks by yield were also 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 April dogs was graded by Wall St. Wizards as 70% accurate.

Estimated dividends from $1000 invested in each of the highest yielding ”Inflation Buster” stocks added to the median of aggregate one-year target prices from analysts (as reported by YCharts) generated the following results. Note: one-year target prices by lone analysts were not included. Ten probable profit-generating trades projected to April 2024 were:

Arbor Realty Trust, Inc. was projected to net $1,122.28, based on the median of target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 94% greater than the market as a whole.

PacWest Bancorp was projected to net $819.34, based on dividends, plus the median of target price estimates from 9 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 36% greater than the market as a whole.

CVS Health Corp (CVS) was projected to net $778.93 based on the median of target price estimates from 23 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 39% less than the market as a whole.

British American Tobacco was projected to net $524.00 based on dividends, plus the median of target estimates from 3 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 55% less than the market as a whole.

Alexandria Real Estate Equities, Inc. (ARE) was projected to net $434.42, based on dividends, plus the median of target price estimates from 10 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% under the market as a whole.

Hasbro, Inc. was projected to net $427.43, based on dividends, plus the median of target price estimates from 12 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% less than the market as a whole.

Fifth Third Bancorp was projected to net $403.08, based on the median of estimates from 21 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 17% greater than the market as a whole.

NexPoint Residential Trust (NXRT) was projected to net $313.79, based on dividends, plus median target price estimates from 7 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% over the market as a whole.

Ares Capital was projected to net $274.81, based on dividends, plus the median of target price estimates from 15 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% over the market as a whole.

AllianceBernstein Holding L.P. was projected to net $252.76, based on the median of target estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 35% greater than the market as a whole.

The average net gain in dividend and price was estimated at 53.51% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 7% 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”.

48 Inflation Busters For 2023-24 Per April Analyst Target Data

48 Inflation Busters 2023-24 By April Yields

Actionable Conclusions (11-20): Ten Top Inflation Busters By Yield For 2023-24

Top ten 2023-24 “Inflation Busting” stocks by yield in April represented five of eleven Morningstar sectors. First place went to the first of two real estate sector representatives, Arbor Realty Trust, Inc. [1]. The other placed tenth, VICI Properties Inc. [10].

Four slots were claimed by financial services sector members: Ares Capital [2]; PacWest Bancorp [3]; AllianceBernstein Holding L.P. [5]; Fifth Third Bancorp [9].

Fourth place was claimed by the single basic materials rep in the top ten, BHP Group Ltd [4].

Two consumer defensive stocks took the sixth and eighth slots on this list, British American Tobacco p.l.c. [6] and Philip Morris International Inc. (PM) [8].

Then, a lone consumer cyclical member placed seventh, Hasbro, Inc. [7] to complete the top ten “Inflation Busters” for 2023-24 dividend pack as of April 10.

Actionable Conclusions: (21-30) Ten Top “Inflation Buster” Dividend Payers For 2023-24 Showed 20.79%-98.22% Upsides While (31) One -2.49% Downsider Reported In April

To quantify top dog rankings, analyst median price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, median analyst target price estimates became another tool to dig out bargains.

Analysts Forecast A 27.79% Advantage For 5 Highest Yield, Lowest Priced of 10 Inflation Busting Stocks for April 2023-24

Ten top UBS, Kiplinger, and Barron’s dividend selections aimed at finding the “Inflation Busters” for 2023-24 were culled by yield for this update. Yield (dividend / price) results provided by YCharts did the ranking.

As noted above, top ten UBS, Kiplinger, and Barron’s dividend selections aimed at finding the best Inflation Buster stocks as screened on 4/10/23 showing the highest dividend yields represented five of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Inflation Buster Dividend Stocks for 2023-24 (32) Delivering 56.19% Vs. (33) 43.97% Net Gains by All Ten Come April 2024

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten UBS, Kiplinger, and Barron’s dividend selections, aimed at finding the “Inflation Busters” for 2022-23 by yield were predicted by analyst 1-year targets to deliver 27.79% more gain than $5,000 invested as $.5k in all ten. The second lowest-priced selection, Arbor Realty Trust, Inc., was projected to deliver the best net gain of 112.23%.

The five lowest-priced top-yield UBS, Kiplinger, and Barron’s dividend selections, aimed at finding “Inflation Busters” as of April 10 were: PacWest Bancorp; Arbor Realty Trust, Inc.; Ares Capital; Fifth Third Bancorp; VICI Properties Inc., with prices ranging from $10.02 to $32.63.

Five higher-priced UBS, Kiplinger, and Barron’s dividend selections, aimed at finding “Inflation Busters” as of April 10 were: AllianceBernstein Holding L.P., British American Tobacco p.l.c., Hasbro, Inc., BHP Group Ltd, and Philip Morris International Inc. whose prices ranged from $34.21 to $98.57.

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

Afterword

This article features 48 UBS, Kiplinger, and Barron’s “Inflation Buster” selections for 2022-23. The article focuses on the top 30 or so dividend payers. Thus, nearly one-third of the original list of companies is neglected. Therefore, below is the complete list of 48 stocks grouped by source.

If somehow you missed the suggestion of which stocks are ripe for picking at the start of this article, here is a reprise of the list at the end:

The prices of 12 of these 48 Kiplinger, and Barron’s dividend selections as “Inflation Buster” stocks for 2023-24 made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those 12 Dogcatcher ideal “inflation Busting” dividend stocks for April are:

Those 12 all live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as “look closer to maybe buy” opportunity.

In a ranking of three-year price gains of the top 30 Inflation Busters by yield, three of the Ideal selections stood out: BHP Group, HP Inc, and The AES Corp.

Source: YCharts.com

How All Ten Top “Inflation Buster” 2023-24 Stocks Could Become Ideal Fair Priced Dogs

Since nine of the top ten Kiplinger and Barron’s “Inflation Buster” stocks for 2023 shares are now priced less than the annual dividends paid out from a $1K investment, the above charts compare those nine plus one at recent prices.

The dollar and percentage differences between recent and fair prices are detailed in the top chart. The recent prices are shown in the middle chart with the fair pricing of all ten top dogs conforming to the dogcatcher ideal detailed in the bottom chart.

With renewed downside market pressure to 27.73%, it is possible for all ten highest-yield UBS, Kiplinger, & Barron’s Inflation Busting Dividend stocks to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a huge head start with nine of ten already fair priced.

Stocks listed above were suggested only as possible reference points for your 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; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog image: Open source dog art from dividenddogcatcher.com.