All but eleven equities and all of the funds listed in this February batch of monthly-paying dividend dogs live up to the ideal of paying annual dividends from a $1K investment exceeding their single share price. Here, in the MoPay collection, lie affordable (yet volatile and risky) bargains. One metric ($1k invested income>1 share price) fits all!
Two years past the 2020 Ides of March market dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may be now.
To learn which of these 101 MoPay equities pay “safer” dividends, navigate to my Dividend Dogcatcher marketplace lists after March 28th by clicking on the last bullet point in the Summary section above.
Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities Could Net 13.21% to 48.24% Gains By March 2023
Six of the ten top-yield MoPay stocks (shaded in the chart below) were verified as being among the top-ten gainers for the coming year based on analysts’ one-year target prices. Thus, the Dogcatcher yield-based strategy for this MoPay group, as graded by broker estimates this month, proved 60% accurate.
Estimated dividend payouts from $1000 invested in each of the ten highest-yielding stocks, plus analysts median 1-yr target prices for those stocks, as reported by YCharts, produced the data points for the gains estimated below. Note: Target prices from lone analysts were not counted. Ten probable profit-generating trades so identified to March 2023 were:
Broadmark Realty Capital (OTCPK:BMRK) netted $482.35 based on the median of target estimates from two analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 14% over the market as a whole.
SLR Senior Investment Corp. (SUNS) netted $269.86 based on the median of target price estimates from two analysts, plus dividends less broker fees. A Beta number was not available for SUNS.
AGNC Investment Corp. (AGNC) was forecast to net $234.50 based on the median of target price estimates from ten analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility equal to the market as a whole.
Dynex Capital Inc (DX) netted $232.09 based on the median of target price estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 19% over the market as a whole.
ARMOUR Residential REIT (ARR) netted $225.97 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 2% under the market as a whole.
Ellington Residential Mortgage REIT (EARN) netted $210.78 based on the median of annual price estimates from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 82% greater than the market as a whole.
Gladstone Commercial Corp. (GOOD) netted $208.63 based on the median of target price estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% greater than the market as a whole.
Horizon Technology Finance Corp. (HRZN) netted $191.13 based on the median of target price estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% greater than the market as a whole.
Ellington Financial Inc. (EFC) netted $188.59 based on the median of target price estimates from eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 96% greater than the market as a whole.
PennantPark Floating Rate Capital Ltd (PFLT) netted $149.41 based on the median of target price estimates from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 84% greater than the market as a whole.
Average net gain in dividend and price was 23.7% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 34% greater than the market as a whole.
Source: Open source dog art from dividenddogcatcher.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”.
March’s Monthly Pay Dividend Data
Three lists produce numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, March 18 closing prices and estimated annual dividends were referenced from Yahoo Finance. Monthly pay (MoPay) equity (1) yield and (2) upside potential lists were compared and contrasted against (3) the 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 (OXSQ); 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. (EFC); Dividend Select 15 Corp. (OTCPK:DVVDF); Chesswood Group Ltd. (OTCPK:CHWWF); Sabine Royalty Trust (SBR); TORC Oil & Gas Ltd. (OTCPK:VREYF); Freehold Royalties Ltd. (OTCPK:FRHLF); ARC Resources Ltd. (OTCPK:AETUF); Inter Pipeline Ltd. (OTCPK:IPPLF); San Juan Basin Royalty Trust (SJT); Ag Growth International Inc. (OTCPK:AGGZF).
Former MoPay top ten regular by yield. Bluerock Residential (BRG) announced December 2019 it was 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 transitioned to QPay in June, 2020. Within three months, however, both SCM and ARR returned to MoPay mode.
Capitala Finance Corp (CPTAL) 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, 2020 the company declared $0.035 monthly distributions for July, August and September 2020 which have persisted for the past two years.
Top yield stock for July 2018, June 2021, and September 2021, Orchid Island Capital, released this cautionary note with its monthly dividend announcements back in 2018: “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. However, in August 2020, ORC monthly dividend increased from $0.06 to $0.065 for September, October and into 2021. ORC now pays a $0.045 monthly dividend but its price has fallen below $5.00 per share, and thus, isn’t listed here.
The U.S. exchange MoPay segment is volatile, transitive, recovering, and adding members. More trades in monthly pay equities are available from Canadian firms, many of which are also listed on U.S. OTC exchanges. Active listed MoPays priced over $2 were up from 71 in October to 73 in February 2021, and since October 2021 at the full strength of over 100 active, not seen for years. This list was limited to 101 by raising the share price limit to $5 and not listing dividends yielding over 20% or under 2%.
US Exchange Traded Monthly Pay Dividend Equities by Yield
Top ten of these U.S. exchange-listed monthly pay dividend equities showing the best yields for March represented just four of the eleven Morningstar market sectors, with representative firms split 1, 1, 7, and 1 between the industrial, financial services, real estate, and energy sectors.
First place was claimed by the industrial sector member, 2020 Bulkers Ltd (OTCPK:TTBKF) . Then, second place went to the financial services sector representative, North American Financial 15 Split Corporation (OTC:FNCSF).
Seven real estate representatives placed third, and fifth, to tenth, ARMOUR Residential REIT Inc. ; Ellington Residential Mortgage REIT ; AGNC Investment Corp ; Ellington Financial Inc. ; Dynex Capital Inc. ; Broadmark Realty Capital ; Generation Income Properties Inc. (GIPR) .
Finally, the top ten collection was bolstered by one energy representative placing fourth, San Juan Basin Royalty Trust (SJT) , which completed the March MoPay top ten equities list by yield.
Monthly Pay Dividend Equities by Price Upsides
Results from YCharts, shown below, show MoPay dividend stocks (as of market closing price March 18) compared with the median of analyst target prices one year-out. The ten top-stocks displayed 7.03% to 39.32% price upsides for the next year based on analyst one-year target price estimates.
Six (tinted) of ten on this to ten price upside list were members of the top ten list by yield. The first five places on this upside list went to: Broadmark Realty Capital , SLR Senior Investment Corp. , Gladstone Commercial Corp , Dynex Capital Inc. , AGNC Investment Corp .
The lower level five were Horizon Technology Finance Corp. , Ellington Residential Mortgage REIT , ARMOUR Residential REIT , Ellington Financial Inc. , and PennantPark Floating Rate Capital Ltd. .
Price upside, of course, was defined as the difference between the current price and analysts’ target one-year median price targets for each stock.
Those ten MoPay stocks showing the highest upside price potential to March 2023 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
Monthly Paid 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 10.75% or greater calculated as of March 18 determined the top ten. All 80 show assets under management (“AUM”) greater than $10M and are priced above $5 per share.
The top-ten monthly-paying dividend investment companies, funds & notes showing the biggest yields for per YCharts & Yahoo Finance data featured five closed-ended investment companies [CEICs], two uncollateralized debt instruments [ETNs], and three open-ended investment companies [ETFs].
The five closed-end investment companies (CEICs) placed first, third, fourth, seventh and ninth, They were: RiverNorth/DoubleLine Strategic Opportunity Fund (OPP) ; RiverNorth Opportunities (RIV) ; Source Capital (SOR) ; PIMCO Dynamic Income (PDI) ; Aberdeen Income Credit Strategies Fund (ACP) .
Two uncollateralized debt instrument companies (ETNs) placed second, and tenth: ETRACS 2x Monthly Pay Leveraged US Small Cap High Dividend ETN (SMHB) , and ETRACS 2xMonthly Pay Leveraged US Small Cap Hi Dividend ETN (PFFL) .
Finally, three open-ended investment companies [ETFs] placed fifth, sixth, and eighth, Saba Closed-End Funds ETF (CEFS) , Global X Russell 2000 Covered Call ETF (RYLD) , and Global X NASDAQ 100 Covered Call ETF (QYLD) , to complete the top-ten Exchange Traded Notes, Exchange Traded Funds, and Closed-End Investment Companies list for March 2022-23.
Compare Equity To Fund Performance
Note that the March 2022 top ten equity dividends are currently priced 6% lower than those of the top ten funds. In September, they were 2% higher. In June, they were 1% higher. The price differences are found in the outlandishly high dividends attributed to the top equities or funds. Without those aberrations, funds are generally priced higher than the equities due to the overhead costs of fund management.
Background and Actionable Conclusions
In June 2012, readers suggested the author include these funds, trusts, and partnerships in the MoPay article. 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 an upside vs. buy & hold in November. Another list factored December 2012 reader comments.
Now we have a new decade of 2020 that began last January, and continued in February, March, April, early May, and mid May, June, July, August, September, October, November, December. The progression continued in 2021 in January, February, March, April, May, June, July, August, September, October, November, and December. And carried on in 2022 January, February, and now March, we compare and contrast MoPay equity upside potential to the yield (and higher risk/volatility), should one be tempted to buy and hold Closed-End Investments or Exchange Traded Funds and Notes.
Yield Metrics Found A 3.67% Advantage For The Five Lowest-Priced Of Ten High-Yield MoPay Equities In March
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 5 Lowest Priced of Top Ten High Yield MoPay Dividend Stocks (11) Would Produce 21.94% VS. (12) 21.16% Net Gains from All Ten by March, 2023
$5,000 invested as $1k in each of the five Lowest priced stocks in the top ten MoPay dividend dog kennel by yield were predicted by analysts’ 1-year targets to deliver 3.67% more net gain than $5,000 invested as $.5k in all ten. The fifth lowest-priced MoPay dividend dog, Broadmark Realty Capital Inc., was predicted to deliver the best net gain of 48.24%.
Lowest priced five MoPay dividend stocks estimated as of March 18 were: North American Financial 15 Split Corp. (OTC:FNCSF); San Juan Basin Royalty Trust; Generation Income Properties, Inc. (GIPR); ARMOUR Residential REIT Inc.; Broadmark Realty Capital Inc., with prices ranging from $5.75 to $8.47.
Higher priced five MoPay dividend equities estimated as of March 17 were: Ellington Residential Mortgage REIT; 2020 Bulkers Ltd. (OTCPK:TTBKF); AGNC Investment Corp.; Dynex Capital Inc.; Ellington Financial Inc., whose prices ranged from $9.83 to $17.62.
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 today 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 90% 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.
If somehow you missed the suggestion of the stocks ripe for picking at the start of this article, here is a reprise of the list at the end:
March MoPay Equities List
(Alphabetical by Ticker)
All but eleven equities and all of the funds listed in this March collection of monthly-paying dividend dogs live up to the ideal of annual dividends from $1K invested exceeding their single share price. Here in the MoPay collection lie affordable yet volatile and risky bargains.
Two years after the 2020 Ides of March dip, and before other pull-backs yet to come, the time to buy top yield MoPay dogs may now be at hand. There have never been more to choose from. This month’s list of 101 was accomplished by raising the minimum price per share for selection from $2 to $5.
Stocks listed above were suggested only as decent starting points for your MoPay dividend 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.ycharts.com; www.dividend.com; finance.yahoo.com; analyst mean target price by YCharts. Open source dog art from dividenddogcatcher.com