Buy 3 June Fortune 500 Industry Dividend Leaders (Watch 4 More)

Foreword

This article is based on Fortune magazine’s 2024 survey of 500 Largest U.S. Corporations (F500-IL).

The Fortune 500, in its 70th year, ranks the biggest U.S. companies by revenue. In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ 31 million people worldwide.

This article covers the top profit generating companies in 66 industries.

Any collection of stocks is more clearly understood when subjected to yield-based (dogcatcher) analysis, this collection of F500-IL for 2024 is perfect for the dogcatcher process. Below are the June 26 data for the 57 dividend stocks populating those F500IL as parsed by YCharts.

The prices of 3 of the 57 dividend selections made the possibility of owning productive dividend shares from this collection a reality for first-time investors.

The 3 Dogcatcher ideal best to buy June 2024 stocks were: Altria Group (MO); Energy Transfer (ET); AT&T (T).

Those three 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 19.3% To 41.46% 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 40% 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 June 2025 were:

Haliburton (HAL) was projected to net $414.64 based on the median of target estimates from 28 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 93% greater than the market as a whole.

ConocoPhillips (COP) was projected to net $271.13 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 23% greater than the market as a whole.

Energy Transfer LP was projected to net $263.27, 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.

Omnicom Group Inc. (OMC) was projected to net $256,24, 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.

Prologis Inc. (PLD) was projected to net $209.48, based on dividends, plus median target price estimates from 21 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 7% greater than the market as a whole.

United Parcel Service (UPS) was projected to net $208.39 based on the median of target price estimates from 29 analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 1% greater than the market as a whole.

Abbott Laboratories (ABT) was projected to net $204.75, based on dividends, plus the median of target price estimates from 21 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 26% less than the market as a whole.

McDonald’s Corp. (MCD) was projected to net $198.78, based on the median of estimates from 31 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 28% less than the market as a whole.

Johnson & Johnson (JNJ) was projected to net $193.26 based on dividends, plus the median of target estimates from 22 brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 46% greater than the market as a whole.

Union Pacific Corp. (UNP) was projected to net $193.03, based on dividends, plus the median of target price estimates from 27 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 5% over the market as a whole.

The average net gain in dividend and price was estimated at 24.13% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 9% 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”.

63 F500-IL In June Per Analyst Target Data

63 F500-IL June Yields

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

Top ten F500-IL by yield in June represented seven of eleven Morningstar sectors. First place was held by the lone consumer staples representative, Altria Group [1].

The energy member placed second, Energy Transfer LP [2]. Then, third place went to communication services, namely, AT&T [3]. A lone industrials member placed fourth, United Parcel Service [4].

The first of two healthcare representatives placed fifth, CVS Health (CVS) [5], the other placed tenth, Johnson & Johnson [10].

Sixth place was claimed by the first of two technology representatives, International Business Machines (IBM) [6]. The other techie took ninth, Cisco Systems (CSCO) [9]. A utilities member took the seventh position, Southern (SO) [7].

Finally, eighth place was claimed by the lone real estate representative, Prologis [8], to complete the 2024 top ten F500-IL dividend pack in June.

Actionable Conclusions: (21-30) Ten Top F500-IL In June Showed 17.12% to 40.46% Upsides, and (31) Three -1.04% & -3.83% 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 19.52% Advantage For 5 Highest Yield, Lowest Priced, of 10 F500-IL Dividend Stocks From June

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

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

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield F500-IL (32) Delivering 17.01% Vs. (33) 15.653% Net Gains by All Ten Come June 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 June 26 were: Energy Transfer LP; AT&T; Altria Group; Cisco Systems; CVS Health, with prices ranging from $15.92 to $60.63.

Five higher-priced F500-IL Dividend Dogs as of June 26 were: Southern Co; Prologis; United Parcel Service; Johnson & Johnson; International Business Machines, whose prices ranged from $78.21 to $171.87.

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 57 dividend paying companies is neglected. To remedy this condition, the following is provided:

A Complete List of 66 Fortune 500 Industry Leaders for 2024

(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 3 of these 66 F500-IL for June made the possibility of owning productive dividend shares from this collection more viable for first-time investors.

Those three 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

Three 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. Three ideal fair-priced stocks plus the seven 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 52.5%, 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 three 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; finance.yahoo.com; analyst mean target price by YCharts. Dog image:Open source dog art from dividenddogcatcher.com.