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ETE Leads Basic Materials Dividend Dogs In Upside, And Gains For March


Ten Basic Materials leader annual yields averaged 32% and mixed higher after February while Dow dogs charged.

Yield by RRMS, OCIP, CLMT, PER, AHGP, SDLP, NGL, MEP, GST-PB, & GST-PA, ranged from 21.71% to 54.o4% as of March 4.

Analyst targets pegged Basic Materials price upsides at 75.12% with net gains averaging 90.42% for ETP; CLMT; NGL; JPEP; CEQP; TROX; EVEP; VNR; WPZ; SDLP. Losers were VNR & MMEP.

Thirty Basic Materials firms averaged 28.74% upsides and 43.46% net gain. Top ten gains ranged from 43.828% to 211.8%.

Analysts of ten Basic Materials sector stocks by yield predicted 3.28% more net gain from $5k invested in the lowest priced five than from $5K put in all ten.

Basic Materials SML Dogs March Roundup

Yield (dividend / price) results from here verified by Yahoo Finance were calculated as of March 4, 2016 for Small, Mid, & Large cap Basic Materials stocks. Small cap firms were valued at $200M(illion) to $2B(illion); Mid cap firms were worth $2B to $10B; Large caps were valued above $10B. Those yield results led to the actionable conclusions discussed below.

Fifty For the Money

Since late 2011 this report series has applied dog dividend methodology to uncover possible buy opportunities in each of eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes). In the past two years the series expanded to report (1) dividend yield; (2) price upside; (3) net gain results based on analyst 1 yr. target projections.

This article intended to reveal bargain stocks to buy and hold up to one year. See Dow 30 article for explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins system works to find bargains in any collection of dividend paying stocks. Utilizing analyst price upside estimates expanded the stock universe to include popular growth equities, as desired.

Dog Metrics Measured Basic Materials Stocks by Yield

Actionable Conclusion (1): O&G Independent Firms Boast Top March Yields As Chem. & Non Metallic Mining Dogs Persist in the Top Ten

Oil and/or gas (o&g) industries housed seven of the top ten basic materials stocks showing the biggest dividend yields for March. One miner placed sixth and the chemical firm took the ninth slot.

Top dogs were two preferred shares in an independent oil and gas exploration firm, Gastar Exploration 8.625% Series A Preferred (GST-PA) [1], and Gastar Exploration 8.625% Series B Preferred (GST-PB) [2]. Third for February was another independent oil and gas exploration firm, Midcoast Energy Partners LP (NYSE:MEP) [3]. Fourth was the diversified refining, marketing, pipeline and storage firm, NGL Energy Partners L.P. (NYSE:NGL) [4].

An O&G refiner and marketer firm completed the top four, NGL Energy [4]. The lone O&G driller found the middle of the BasMat list in fifth place: Seadrill Partners LLC (NYSE:SDLP) [5]. The lone non-metallic mineral miner placed sixth, Alliance Holdings Group (NASDAQ:AHGP) [6].

Three more O&G firms placed seventh, eighth and tenth on the list: Seventh place was claimed by the last independent O&G firm in the top ten, Sandridge Permian Trust (NYSE:PER) [7]; another O&G refiner and marketer, Calumet Specialty Products L.P. (NASDAQ:CLMT) placed eighth [8], and the lone major integrated O&G firm placed tenth, Rose Rock Midstream L.P. (NYSE:RRMS) [10].

Finally, the major chemical company placed ninth, OCI Partners LP (NYSE:OCIP) [9], to complete the top ten basic materials dogs by yield list of March 4.

Basic Materials Top Ten Price vs. Dividend Results Compared With Dogs of The Dow

Relative strengths of the top ten basic materials dogs graphed below by yield were plotted as of market close 3/4/2016 and compared to those of the Dow. Projected annual dividend history from $10,000 invested as $1k in each of the ten highest yielding stocks and the total single share prices of those ten stocks created the data points shown in green for price and blue for dividend.

Actionable Conclusions: (2) Basic Materials Top Ten Mixed Up As (3) Dow Dogs Charged Into March

Dividend from $10k invested as $1k in each of the basic material top ten dogs continued upward into March, and the aggregate single share price of the top ten also increased. Dividend rose at a rate of 6% while total single share price rose 2.6%.

Meanwhile, Dow dogs also charged as they showed lower annual dividend from $10k invested as $1K in each of the top ten, falling 3.9% after February. Meanwhile, aggregate single share price rose 4.8%. As a result, the Dow dogs overbought condition (in which aggregate single share price of the ten exceeded projected annual dividend from $10k invested as $1k each in those ten) increased.

Historically, the overhang was $295 or 81% for a new annual record April 9; the gap extended to $321 or 90% May 1; swelled to $392 or 104% June 5, marking new 2014-15 yearly record gaps each time.

A July 1 price retreat narrowed the gap to $237 or 63%. However to begin August, IBMs high price and dividend pushed the gap to $343 or 89%. As September dawned, KO ascended and PFE was back in tenth while nearly all ten dogs dropped in price to temporarily shrink the gap to $273...