All but five equities and all of the funds listed in this January 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 and almost ten months past the 2020 Ides of March market dip, and before other pullbacks yet to come, the time to buy top yield MoPay dogs may be now.
Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities Could Net 13.68% to 59.5% Gains By January 2024
Six of 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 analyst 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 $1,000 invested in each of the ten highest-yielding stocks, plus analysts median 1yr target prices for those stocks, as reported by YCharts, produced the data points for the gains estimates below. (Note: target prices from lone analysts were not counted.) Ten probable profit-generating trades so identified to January 2024 were:
Orchid Island Capital Inc (ORC) netted $594.98 based on the median of target estimates from 2 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 54% greater than the market as a whole.
Oxford Square Capital Corp (OXSQ) netted $488.51 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% greater than the market as a whole.
Broadmark Realty Capital Inc (BRMK) was forecast to net $329.92 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. A Beta number was not available for BRMK.
SL Green Realty Corp (SLG) netted $218.85 based on the median of target estimates from 18 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 42% over the market as a whole.
Ellington Financial Inc (EFC) netted $201.69 based on the median of target price estimates from 8 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 82% greater than the market as a whole.
Horizon Technology Finance (HRZN) netted $200.72 based on the median of target estimates from 7 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 18% greater than the market as a whole.
Financial 15 Split Corp (OTCPK:FNNCF) netted $144.80 based on Dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 18% greater than the market as a whole.
PennantPark Floating Rate Capital Ltd (PFLT) netted $144.32, based on the median of target price estimates from 4 analysts, plus dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 67% greater than the market as a whole.
SLR Investment Corp (SLRC) netted $142.19 based on the median of target price estimates from 9 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% over the market as a whole.
Stellus Capital Investment (SCM) netted $136.75 based on the median of annual price estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% greater than the market as a whole.
Average net gain in dividend and price was 26.03% on $1K invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 22% 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 specifically, these are, in fact, best called “underdogs”.
January’s Monthly Pay Dividend Data
Three lists produce numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, January 20 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 May and June, 2020, including: Oxford Square Capital Corp; Partners Real Estate Investment Trust; Orchid Island Capital Inc; Cross Timbers Royalty Trust; H&R Real Estate Investment Trust; BTB Real Estate Investment Trust; American Finance Trust Inc; Mesa Royalty Trust; Solar Senior Capital Ltd; Ellington Financial Inc; Dividend Select 15 Corp; Chesswood Group Ltd; Sabine Royalty Trust; TORC Oil & Gas Ltd; Freehold Royalties Ltd; ARC Resources Ltd; Inter Pipeline Ltd; San Juan Basin Royalty Trust; Ag Growth International Inc.
Former MoPay top ten regular by yield. Bluerock Residential (BRG) announced in December 2019 it was retreating to quarterly dividend payments “in keeping with industry tradition.” That tradition continued with ARMOUR Residential REIT and Stellus Capital Investment Corp both transitioned to QPay in June 2020. Within three months, however, both SCM and ARR returned to MoPay mode.
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, 2020, the company declared $0.035 monthly distributions for July, August and September 2020 which have persisted for the past two and three-quarter + 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 $0.16 monthly dividend and is again 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 (Pink Sheet) 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 $3 and not listing dividends yielding over 25% or under 3%.
US Exchange Traded MoPay Dividend Equities by Yield
Top ten of these US exchange listed monthly pay dividend equities showing the best yields for January, represented just three of the eleven Morningstar market sectors. Representative firms split 6, 1, and 3 between the real estate, energy, and financial services sectors.
First place went to the first of six real estate representatives: ARMOUR Residential REIT Inc (ARR). Following in second, third, sixth, seventh, and ninth places were Broadmark Realty Capital Inc ; Orchid Island Capital ; Ellington Financial Inc ; AGNC Investment Corp (AGNC) ; Ellington Residential Mortgage REIT (EARN) .
Fourth, eighth and tenth places were occupied by three financial services sector members , Financial 15 Split Corporation ; Oxford Square Capital Corp ; Stellus Capital Investment Corp .
Finally, in fifth place was the lone energy representative, San Juan Basin Royalty Trust (SJT) , which completed the January MoPay top ten equities list by yield.
Monthly Pay Dividend Equities by Price Upsides (and Downsides)
Results from YCharts, shown below, show 30 MoPay dividend stocks (as of market closing price January 20) compared with the median of analyst target prices one year-out. The ten top-stocks displayed 0.38% to 44.63% price upsides for the next year based on analyst one-year target price estimates.
Six (tinted) of ten on this top ten price upside list were also members of the top ten list by yield. The first five places on this upside list went to: Orchid Island Capital Inc , Oxford Square Capital Corp , Broadmark Realty Capital Inc ; SL Green Corp , and Horizon Technology Finance .
The higher level five were, Ellington Financial Inc , PennantPark Floating Rate Capital Ltd , SLR Investment Corp , Stellus Capital Investment Corp , and Ellington Residential Mortgage REIT .
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 ten MoPay stocks showing the highest upside price potential to January 2024 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.
MoPay Dividend Closed End Investment Companies, Exchange Traded Funds, and Notes, by Yield
Eighty top monthly dividend paying Closed End Funds, Exchange Traded Funds and Notes listed below were culled from nearly 800 candidates. Yields of 14.45% or greater, calculated as of January 20, 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 four closed-ended investment company [CEICs], three uncollateralized debt instruments [ETNs], and three open-ended investment companies [ETFs].
Four closed end investment companies (CEICs) placed first, fourth, seventh, and tenth. They were: Eagle Point Credit Co LLC (ECC) ; PIMCO Dynamic Income Funds (PDO)  and (PDI) ; RiverNorth Opportunities Fund Inc (RIV) .
The three uncollateralized debt instrument companies (ETNs) placed second, third and eighth: ETRACS Monthly Pay 1.5X Mortgage REIT ETN (MVRL) , ETRACS 2x Monthly Pay Leveraged US Small Cap High Dividend ETN (SMHB) , and ETRACS Monthly Pay 1.5X Leveraged Closed-End Fund Index ETN (CEFD) .
Finally, three open ended investment companies [ETFs] placed fifth, sixth, and ninth, Franklin International Aggregate Bond ETF (FLIA) , ProShares K-1 Free Crude Oil Strategy ETF (OILK) , and Simplify Volatility Premium ETF (SVOL) , to complete the top-ten Exchange Traded Notes, Exchange Traded Funds, and Closed End Investment Companies list for January, 2023-24.
Compare Equity To Fund Performance
Note that the January 2023-24 top ten equity dividends are currently priced 3% under those of the top ten funds. Last September, they were 2% higher. Last June, they were 1% higher. The price differences were found in the outlandishly high dividends attributed to the top equities or funds. Without those odd 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, March, April, May, June/July, August, September, October, November, December, and now, January, 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 5.7% Advantage For The Five Lowest-Priced Of Ten High-Yield MoPay Equities In January
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 23.54% VS. (12) 22.27% Net Gains from All Ten by January 2024
$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 analyst 1-year targets to deliver 5.7% more net gain than $5,000 invested as $.5K in all ten. The eighth lowest-priced MoPay dividend dog, Orchid Island Capital, was predicted to deliver the best net gain of 59.5%.
Lowest priced five MoPay dividend stocks estimated as of January 20 were: Oxford Square Capital Corp; Broadmark Realty Capital Inc; ARMOUR Residential REIT Inc; Financial 15 Split Corp; Ellington Residential Mortgage REIT, with prices ranging from $3.45 to $7.97.
Higher priced five MoPay dividend equities, estimated as of December 22, were: Juan Basin Royalty Trust; AGNC Investment Corp; Orchid Island Capital Inc; Stellus Capital Investment Corp; Ellington Financial Inc, whose prices ranged from $10.86 to $13.70.
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, is today useful 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 85% accurate on the direction of change and about 0% to 15% 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:
January MoPay Equities List
(Alphabetical by Ticker)
All but five equities and all of the funds listed in this January 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 and seven eighths years after the 2020 Ides of March dip, and before other pullbacks 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 holding the maximum yield to under 25%, setting the minimum price per share for selection at $3, and boosting the minimum yields to 3%.
Stocks listed above were suggested only as decent starting points for your MoPay dividend stock purchase or sale research process. These were not recommendations.
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.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.