4 Fortune 500 Industry Leaders Boast Ideal June Dividends

Foreword

This article is based on Fortune magazine’s 2023 survey of 500 Largest U.S. Corporations (F500-IL).

“Size matters: the 50 largest companies on this year’s list accounted for 49% of total Fortune 500 revenue and 45% of earnings.” This article covers those 50 and 18 more as industry leaders. The 2024 list is due out in June, assuming fortune adheres to the past year’s production schedules.

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this collection of F500-IL for 2023 is perfect for the dogcatcher process. Below are the May 30 data for the 58 dividend stocks populating those F500IL as parsed by YCharts.

The prices of 4 of the 58 dividend selections made the possibility of owning productive dividend shares from this collection a reality for first-time investors.

The 4 Dogcatcher ideal best to buy May 2024 stocks were: Energy Transfer LP (ET); Verizon Communications (VZ); Pfizer (PFE); Ford Motor (F).

Those four all live up to the ideal of having their annual dividends from a $1K investment exceed their single share prices. Many investors see this condition as “look closer to maybe buy” opportunity.

Actionable Conclusions (1-10): Analysts Estimated 16.82% To 32.87% Net Gains From Ten F500-IL Dividend Stocks Into June 2025

Four of ten top F500-IL dividend stocks by yield were also 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 May favorites was graded by Wall St. Wizards as 50% accurate.

Estimated dividends from $1000 invested in each of the highest yielding F500-IL stocks, added to the median of aggregate one-year target prices from analysts (as reported by YCharts), generated the following list. (Note: one-year target-prices by lone-analysts were not included.) Thus, ten probable profit-generating trades, projected to May 2025 were:

CVS Health (CVS) was projected to net $290.18 based on the median of target estimates from 26 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% less than the market as a whole.

Energy Transfer LP was projected to net $281.48, based on the median of target price estimates from 17 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 64% greater than the market as a whole.

Baker Hughes (BKR) was projected to net $259.74 based on dividends, plus the median of target price estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 44% greater than the market as a whole.

Ford Motor Co was projected to net $241.51, based on dividends, plus median target price estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 62% greater than the market as a whole.

United Parcel Service (UPS) was projected to net $224.94 based on the median of target price estimates from 28 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% greater than the market as a whole.

Omnicom Group Inc. (OMC) was projected to net $222.40, based on dividends, plus the median of target price estimates from 11 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 4% less than the market as a whole.

Genuine Parts Co. (GPC) was projected to net $211.18, based on dividends, plus the median of target price estimates from 11 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 6% less than the market as a whole.

Cisco Systems Inc. (CSCO) was projected to net $204.23, based on the median of estimates from 22 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 13% less than the market as a whole.

Sysco Corp. (SYY) was projected to net $199.24 based on dividends, plus the median of target estimates from 15 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 16% greater than the market as a whole.

MetLife (MET) was projected to net $198.78, based on dividends, plus the median of target price estimates from 125 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% over the market as a whole.

The average net gain in dividend and price was estimated at 23.34% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 15% 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 precisely, these are, in fact, best called, “underdogs”.

65 F500-IL In May Per Analyst Target Data

65 F500-IL May Yields

Actionable Conclusions (11-20): Ten Top F500-IL By Yield

Top ten F500-IL by yield in May represented eight of eleven Morningstar sectors. First place was held by the lone energy representative, Energy Transfer LP [1].

The communication services member placed second, Verizon Communications. Then, third place went to the first of two healthcare representatives, Pfizer [3] (PFE), the other placed eighth, CVS Health Corp. [8].

Fourth place was claimed by the consumer defensive representative, Philip Morris International (PM) [4]. A consumer cyclical member took the fifth position, Ford Motor [5].

One basic materials sector member placed sixth, Dow (DOW) [6]. The first of two industrials members placed seventh, United Parcel Service (UPS) [7]. The other placed ninth, ManpowerGroup Inc. (MAN) [9].

Finally, tenth place was claimed by the lone technology representative, International Business Machines Corporation (IBM) [10], to complete the top ten F500-IL dividend pack in May.

Actionable Conclusions: (21-30) Ten Top F500-IL In May Showed 17.95% to 25.55% Upsides, and (31) Two -2.02% & -4.70% Down-siders

To quantify top dog rankings, analyst median price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, median analyst target price estimates became another tool to dig out bargains.

Analysts Forecast A 17.14% Advantage For 5 Highest Yield, Lowest Priced, of 10 F500-IL Dividend Stocks From May

Ten top Fortune F500-IL yield (dividend / price) results, provided by YCharts, produced the following ranking.

As noted above top ten F500-IL stocks screened 5/30/24, showing the highest dividend yields, represented eight of eleven in the Morningstar sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield F500-IL (32) Delivering 23.68% Vs. (33) 18.63% Net Gains by All Ten Come May 2025

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten F500-IL by yield were predicted by analyst 1-year targets to deliver 27.11% more gain than $5,000 invested as $0.5k in all ten. The fifth lowest-priced selection, CVS Health Corp., was projected to deliver the best net gain of 29.02%.

The five lowest-priced top-yield F500-IL for 2023 Dividend Dogs as of May 30 were: Ford Motor; Energy Transfer LP; Pfizer; Verizon Communications; CVS Health, with prices ranging from $11.77 to $56.04.

Five higher-priced F500-IL Dividend Dogs as of May 30 were: Dow Inc; ManpowerGroup; Philip Morris International; United Parcel Service; International Business Machines, whose prices ranged from $57.39 to $165.63.

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 15% to 85% accurate on the direction of change and just 0% to 15% 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.

Afterword

This article features Fortune 500 Industry Leaders and focuses on the top 30 for March. Therefore, near half the original list of 58 dividend paying companies is neglected. To remedy this condition, the following is provided

A Complete List of 68 Fortune 500 Industry Leaders

(Stocks are grouped alphabetically by ticker, in ascending order.) The bluish-greenish tinted stocks are Sector Leaders. The three wine-tinted listings are privately owned, or foreign exchange listed stocks not included in the YCharts listings.

If somehow you missed the suggestion of which stocks are ripe for picking at the start of this article, here is a reprise of the list at the end:

The prices of 4 of these 68 F500-IL for May made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those four all live up to the ideal of having their annual dividends from a $1K investment equal or exceed their single share prices. Many investors see this condition as “look closer to maybe buy” opportunity.

How All Ten Top F500-IL Stocks Could Become Ideal Fair Priced Dogs

Four of the top ten F500-IL stocks in May 2024 were priced less than the annual dividends paid out from a $1K investment. The dollar and percentage differences between recent and fair prices are detailed in the top chart. Four ideal fair-priced stocks plus the six at current prices are shown in the middle chart. Finally, the fair pricing of all ten top dogs conforming to that ideal are the subject of the bottom chart.

With renewed downside market pressure to 50.7%, it is possible for all ten highest-yield F500-IL stocks, to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. This pack got a nice head-start with four of ten already fair priced.

Stocks listed above were suggested only as possible reference points for your 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; Yahoo Finance – Stock Market Live, Quotes, Business & Finance News; analyst mean target price by YCharts. Dog image: Open source dog art from Dividend Dog Catcher .