Bloomberg Global Data Division Analysts, who track over 2000 companies around the planet, identified 50 “poised to release products or services with blockbuster potential in 2020, as well as ones facing unusual challenges.”
The Bloomberg analysts considered revenue growth, margins, market share, debt, and factors such as economic conditions to determine their 50 to watch.
31 of their selections pay dividends. Three of the 50 companies named have no tickers tracked by YCharts.
As with all such lists, the dogs prevail and the underdogs show themselves for what they are.
Actionable Conclusions (1-10): Analysts Estimated 13.28% To 53.05% November Net Gains For 10 Top Bloomberg 2020 50 Watchdogs
Five of these 10 top Bloomberg 2020 50 Watch 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 November dogs was graded by Wall St. Wizards as 50% accurate.
Projections were based on estimated dividends from $1k invested in each of the highest-yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts. Note: One-year target prices by lone analysts were not applied. 10 probable profit-generating trades projected to October 25, 2020 were:
Fiat Chrysler Automobiles (FCAU) was projected to net $530.55, based on a median of target price estimates from 29 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 37% less than the market as a whole.
MPLX LP (MPLX) was projected to net $412.67, based on the median of target estimates from 18 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 11% more than the market as a whole.
Bayer AG (OTCPK:BAYRY) was projected to net $340.86 based on dividends, plus the median of target estimates from two brokers, less transaction fees. The Beta number showed this estimate subject to risk 5% over the market as a whole.
Enterprise Products Partners (EPD) was projected to net $332.44, based on a median of target price estimates from 27 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 13% less than the market as a whole.
Schlumberger Ltd. (SLB) was projected to net $289.52, based on dividends, plus the median of target price estimates from 33 analysts, less broker fees. The Beta number showed this estimate subject to risk 50% more than the market as a whole.
SalMar ASA (OTCPK:SALRY) was projected to net $289.52, based on projected annual dividends only, less broker fees. A Beta number was not available for SALRY.
Johnson & Johnson (JNJ) was projected to net $183.60, based on dividends, plus the median of target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to risk 93% less than the market as a whole.
American International Group (AIG) was projected to net $161.93, based on dividends, plus the median of target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to risk 19% over the market as a whole.
Constellation Brands (STZ) was projected to net $157.77, based on dividends, plus median target price estimates from 16 analysts, less broker fees. The Beta number showed this estimate subject to risk 31% less than the market as a whole.
CVS Health Corp. (CVS) netted $132.84 based on the median of estimates from 29 analysts, plus dividends. The Beta number showed this estimate subject to risk, 12% less than the market as a whole.
The average net gain in dividend and price was estimated at 27.57% on $10k invested as $1k in each of these 10 stocks. These gain estimates were subject to average risks 3% above 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.”
Bloomberg 2020 50 Stocks Per November Target Gains
Bloomberg 2020 50 Stocks By November Yield
Actionable Conclusions (11-20): 10 Top Bloomberg 2020 50 Watch Dogs By Yield
Top 10 Bloomberg 2020 50 Watch Stocks uncovered 10/25/19 by yield represented five of eleven Morningstar sectors. The first, and eighth places were claimed by consumer defensive sector representatives, SalMar ASA , The Kraft Heinz Co. (KHC) .
The second, sixth, and seventh places on this list went to energy enterprises, MPLX LP , Enterprise Products Partners LP , and Schlumberger Ltd. .
Two financial services representatives emerged in third and fourth places by yield, Standard Life Aberdeen Plc, and Aegon NV (OTCPK:AEGOF) . After that, two communication services representatives placed fifth, and tenth, BT Group Plc (BT) , and AT&T Inc. (T) .
Finally, a lone consumer cyclical representative placed ninth, Fiat Chrysler Automobiles NV (FCAU)  to complete the Bloomberg 2020 50 top ten watchdogs by yield for November.
Actionable Conclusions: (21-30) Top 10 Bloomberg 2020 50 WatchDogs Showed 11.5%-48.5% Upsides While (31) No Downsiders Emerged
To quantify top dog rankings, analyst mean price target estimates provided 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 An 11.41% Disadvantage For Five Highest Yield, Lowest-Priced Bloomberg 2020 50 WatchDogs To November 2020
10 top Miscellaneous reliable dividend dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.
As noted above, top 10 Bloomberg 2020 50 Watchdogs screened 10/25/19 showing the highest dividend yields represented five of 11 in the Morningstar sector scheme.
Actionable Conclusions: Analysts Predicted Five Lowest-Priced Of The Top 10 Highest-Yield Bloomberg 2020 50 Watchdogs (32) Delivering 19.26% Vs. (33 ) 21.74% Net Gains by All 10 Come November 2020
$5k invested as $1k in each of the five lowest-priced stocks in the top 10 Bloomberg 2020 50 kennel by yield were predicted by analyst one-year targets to deliver 11.41% LESS gain than $5k invested as $.5k in all 10. The fourth lowest priced, Fiat Chrysler Automobiles NV, was projected to deliver the best net gain of 53.05%.
The five lowest-priced top-yield Bloomberg 2020 50 Watchdogs as of October 25 were: BT Group Plc, Aegon NV, SalMar ASA, Fiat Chrysler Automobiles NV, and Standard Life Aberdeen Plc, with prices ranging from $2.54 to $15.45.
Five higher-priced Bloomberg 2020 50 Watchdogs as of October 25 were: MPLX LP, Enterprise Products Partners LP, The Kraft Heinz Co., Schlumberger Ltd., and AT&T Inc., whose prices ranged from $26.76 to $36.91.
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.
Stocks listed above were suggested only as possible reference points for your Bloomberg 2020 50 Watchdogs 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: wagwalking.com.
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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: 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.