Category Archives: Performance Review

Watch Lists v. Indexes: Week 10

On January 6, 2020, we published our U.S. Dividend Watch List.  On that list we broke out the data based on a ranking by fundamentals.  Of the stocks that we highlighted, two categories that we liked are the top three low yield stocks and the top five high P/E stocks. 

The performance of both groups are shown in contrast to the Dow Jones Industrial Average and S&P 500  from the close of January 3, 2020 to the close of March 6, 2020.

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Counter trend movement can be seen by the Top 3 and Top 5 lists, relative to the indexes.  The only question is how long can this exceptional movement last?

Watch Lists v. Indexes: Week 9

On January 6, 2020, we published our U.S. Dividend Watch List.  On that list we broke out the data based on a ranking by fundamentals.  Of the stocks that we highlighted, two categories that we liked are the top three low yield stocks and the top five high P/E stocks.

The performance of both groups are shown in contrast to the Dow Jones Industrial Average and S&P 500  from the close of January 3, 2020 to the close of February 28, 2020.

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Last week, we said the following:

“We don’t expect this chasm between our lists and the DJIA to persist…”

The difference between our Top 3 stocks and the DJIA was 4.40% (in favor of our list).  The difference between the Top 3 and the DJIA is 3.98% (in favor of our list).  The tide is quickly shifting in the opposite direction and the change is incrementally gaining ground between the DJIA and the Top 3.

Conventional wisdom is being defied based on the above charts.  We’ll withhold our take on this matter until the decline is fully reversed.

Watch List v. DJIA: week 8

On January 6, 2020, we published our U.S. Dividend Watch List.  On that list we broke out the data based on a ranking by fundamentals.  Of the stocks that we highlighted, two categories that we liked are the top three low yield stocks and the top five high P/E stocks. 

The performance of both groups are shown in contrast to the Dow Jones Industrial Average from the close of January 3, 2020 to the close of February 21, 2020.

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So far there is a wide divergence of our watch lists as compared to the DJIA in the period from the January 3, 2020 close to the February 21,2020 close.  We don’t expect this chasm between our lists and the DJIA to persist and will update as we go through the year.

Review: Canadian List Sept 2018

The table below outlines the performance of the top five of the Canadian Dividend Watch list for September 2018.

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The orange circles indicate where, among the top five, the performance was improved if the top 2nd, 3rd and 4th stocks were selected instead of buying the top five.

A very important observation is taking the performance of the top five low yield stocks and the top five high yield stocks.  According to the Dogs of the Dow investment strategy, selecting the top ten stocks with the highest yield will result in higher performance than the representative index.  In this case, the Toronto Stock Exchange is the index we compare the performance to.

In the case of the high yield stocks, they generated returns of –16.23% while the low yield stocks generated returns of +16.35%.  The chasm in performance between the two is wide, deep, and consistent on a historical basis. 

We are confident that if you are an investor seeking average returns then you will not find it in the group of the highest yielding stocks.  In addition, low yielding stocks are able, on a consistent basis, to provided competitive returns year in and year out, as confirmed in our work of the same stocks in the Dow Jones Industrial Average since 1996.

Performance Review: September 21, 2018

Below is the performance review of the top five stocks based on price-to-book, price-to-earnings and dividend yield ratios from our September 21, 2018 U.S. Dividend Watch List.

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In the period from September 21, 2018 to September 20, 2019 (intraday), the Dow Jones Industrial Average increased +1%. The best performing group was the low payout ratio stocks with a gain of +8.85%. The worst performing group was the low p/e stocks was a loss of –14.09%.

Worth noting is the performance of the low yield stocks which gained +7.17% while the counterpart high yield stocks lost –6.76%.  This continues to bolster our position that low yield stocks will routinely outperform the high yield stocks.

Also of interest is the fact that high p/e stock beat low p/e stocks, high p/b stocks beat low p/b stocks and low payout stocks beat high payout stocks.

Performance Review: November 11, 2011

Below is the 6-year performance of our Dividend Watch List from November 11, 2011 to November 9, 2017 as compared to the Dow Jones Industrial Average.

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Performance Review: November 9, 2012

Below is the 5-year performance of our Dividend Watch List from November 9, 2012 to November 8, 2017 as compared to the Dow Jones Industrial Average.

Performance Review: November 8, 2013

Below is the 4-year performance of our Dividend Watch List from November 8, 2013 to November 7, 2017 as compared to the Dow Jones Industrial Average.

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Performance Review: October 23, 2015

Below is the 2-year performance of our Dividend Watch List from October 23, 2015 to October 26, 2017 as compared to the Dow Jones Industrial Average.

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Analyst Estimates: U.S. Dividend Watch List

Performance Review

On October 21, 2016, we posted analyst estimates for the expected gains for our watch list stocks dated October 14, 2016.  Below is the performance review of the stocks that were part of that assessment.

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At the time, we grouped the stocks into three separate categories (“high risk, high return,” “average risk, average return,” and “high expectation, low return”) as seen in the chart below:

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As separate categories, the returns were as follows:

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We have to be mindful of the fact that the high, average, and low returns are based on long term expectations for similar stocks.  When contrasted against the Dow Jones Industrial Average, which gained +27.91% over the same time, the gains of each category are hardly “high” or “average.”

Performance Review: October 19, 2012

Below is the 5-year performance of our Dividend Watch List from October 19, 2012 to October 20, 2017 as compared to the Dow Jones Industrial Average.

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Performance Review: October 16, 2015

Below is the 2-year performance of our U.S. Dividend Watch List from October 16, 2015 to October 16, 2017 as compared to the Dow Jones Industrial Average.

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Performance Review: Helmerich and Payne

On January 15, 2017, we reviewed Helmerich and Payne (HP) after it achieved our July 2, 2016 upside target of $79.16.  At the time, we reflected on the following thoughts:

“The only question now is the selling of the stock.”

For all intents and purposes, HP should have been considered for selling the principal or the entire position.  Since the January 15, 2017 posting the stock has had the following price action:

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Our fear then was, “Can we handle see[ing] the stock fall back to where we bought it?”  This thought only comes to mind when or if the stock price substantially exceeds the norm for an individual investment.  At the time, HP had annualized gains of more than +60%.

For now, it is back to the drawing board for HP.  We’ll have to re-examine the attributes for the stock to determine if investment is warranted or not.

Canadian Dividend Watch List Review

Performance Review

Below is a graphing of the Canadian Dividend Watch List performance from October 2015.

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The performance of the watch list from October 2015 shows exactly what we suspected. At the time, we said the following:

“Our best guess is that the analysts are too optimistic.  We’d aim for the stocks that are slated to generate average returns going forward.”

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When compared to the other categories, our guess that the group marked as “average”  would exceed the analyst expectations was fairly accurate.  As luck would have it, our perspective prevailed while exceeding the Toronto Stock Exchange.  Click on the above “analyst estimate” chart to see how we ranked the stocks for each category.

Performance Review: Family Dollar

On March 31, 2014, we summarized our thoughts on Family Dollar (FDO) in a Quick Take posting with the following:

“Falling below the $55.07 support line suggests that FDO could decline to $47 in the near term.  Investors interested in FDO could break their investment into at least two purchases, the first being 60% of the intended amount now and the second purchase of 40% at either of the two indicated support levels at $44.95 or $34.83.”

Like moths to a flame, we were encouraged by Value Line Investment Survey’s assessment that “…would-be investors to look else-where.” As we saw it, the fundamentals and technicals supported the idea that Family Dollar was worth investing in (at least 60% of funds committed as part of a balanced portfolio).

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