Profit from analyst errors - lock in yields up to 18.3%, plus growth potential!

A prominent academic analysis of analyst price target precision revealed that roughly 54% of 12-month targets accurately forecasted even the basic direction of future price shifts.

Fifty-four percent. Just for direction only. That's scarcely superior to flipping a coin!

Analysts issue precise price targets for stocks as if they were gospel. Truth is, they struggle to predict whether prices will rise or fall.

The situation worsens. A 2024 Yale School of Management report showed analysts routinely postpone downgrades after negative news - to maintain good relations with covered firms. These experts aren't merely poor at forecasting; they intentionally withhold cautions to safeguard investment banking ties.

Combine these insights, and the reality emerges. Wall Street "research" is often unreliable. This makes it a powerful contrarian signal!

When consensus price targets fall under current stock prices, it's not a sell cue. It's a sign of maximum negativity already priced in! A single solid earnings release can propel shares upward as analysts rush to adjust.

Here, we examine five shunned dividend stocks yielding 6.7% to 18.3%, poised for gains if sentiment shifts.

Virtus Investment Partners (VRTS)
Dividend Yield: 6.7%

Begin with Virtus Investment Partners (VRTS), an asset manager offering mutual funds, ETFs, CEFs, insurance products, separately managed accounts, and beyond.

Unlike giants like Vanguard or Fidelity, its roughly $160 billion AUM is modest, and the name may be unfamiliar to many.

Virtus distinguishes itself via a partnership model with boutique advisers, so funds under its banner are run by varied teams.

Source: Virtus Investment Partners, March 2026 Investor Presentation

The firm hit highs in late 2021 during market rebound. Since, it shed nearly 60% value amid revenue and profit slowdowns. Analysts foresee single-digit drops this year too.

Challenges include underperforming key funds and its active-management focus (higher fees) in a passive, low-cost era.

Consequently, Wall Street remains bearish. Hated stocks often get sparse coverage - analysts avoid offending management. VRTS has four analysts: one Buy, one Hold, two Sells - a harsh divide.

Yet Virtus offers contrarian merits.

Shares fetch just 5.5 times next-year earnings. Dividends surged over 400% in a decade, nearly doubling in five years, safely under 40% of projected earnings. Acquisitions like Alphasimplex, AGI, and Stone Harbor aim for growth.

Alexander's (ALX)
Dividend Yield: 7.6%

Alexander's (ALX) is a REIT focused on greater New York City, mainly offices but with retail and residential. Vornado Realty Trust (VNO), NYC-centric (plus Chicago, San Francisco spots), holds 32.4% and manages it, incurring fees for ALX.

Key trait: extreme concentration. Only five properties - soon four after selling Rego Park I to Northwell Health for $202 million net.

In summary:

Alexander's slim holdings shrink further.
External management fees persist despite scale.
Trailing 12-month EPS $10.82, 2026 forecast $12.08, yet dividends near $18 per share - over 50% more.
Trades at 19 times next-year AFFO.
Single analyst rates it Sell.

No Dividend Growth for Alexander's Since 2018

I flagged its unpopularity in November. It gained 15% since, inflating valuation further.

Further upside challenges logic.

ConAgra Brands (CAG)
Dividend Yield: 10.0%

Pantry staples firms face headwinds now. Sector yields rose from sales pressure; analysts agree, targeting Kraft Heinz (KHC), Campbell's Soup (CPB), General Mills (GIS) - a GLP-1 casualty.

Most despised: Conagra Brands (CAG), yield soaring from prolonged share decline.

CAG Dividend Dwarfs Past Norms

Conagra's brands: Banquet, Healthy Choice, Marie Callender's, Vlasic, Duncan Hines, Slim Jim, Reddi-Wip, etc. Foodservice adds diversification.

Hit by GLP-1 drugs, input inflation, SNAP cuts, private labels. Revenue, profits shrink; more ahead.

Analysts wary: 10 Holds, 2 Buys, 4 Sells - effectively bearish consensus.

Dividend strains at 80% of lower 2026 earnings - manageable for defensives but limits M&A and exceeds 50-55% target.

Western Union (WU)
Dividend Yield: 10.5%

Western Union (WU) started in telegraphs; now remittances amid digital rivals like PayPal, Venmo.

From afar, it looks obsolete - yet 10 Holds, 1 Buy, 6 Sells seems almost generous.

Western Union fights back.

"Evolve 2025" brings products, efficiencies.

April 2025: $77 million for Eurochange, boosting Travel Money.

Summer: $500 million for Intermex (IMXI), serving millions remitting to 60+ countries (closes mid-2026).

Digital push: USDPT stablecoin, Digital Asset Network for crypto cash-outs at 380,000 agents. Visa stable card soon.

Can it halt cash-transfer erosion? Revenues to rise mid-single-digits this year/next; profits flat fourth year, but 10% 2027 gain eyed.

Will Western Union Reverse the Slide?

Prospect Capital (PSEC)
Dividend Yield: 18.3%

Prospect Capital (PSEC) boasts eye-popping traits: 18%+ yield, monthly payouts, 60% NAV discount - cheapest BDC.

But...

4 Cuts, Minimal Gains in 12 Years

Past woes compounded by May dividend trim.

One analyst left, rates Sell.

Still sizable: $1.2 billion market cap, $3 billion assets.

89 investments in 31 sectors (down from more). Shifting: 72% first-lien, 12.4% second-lien, exited CLO equity, real estate.

Defensive: 3% software vs. peers' 23%.

Progress possible, but track record demands proof. Net interest income down quarterly, 8% full-year profit drop, another cut.

Dependable 9%+ Monthly Yields!

2-3% yields abound easily.

High payers demand caution - many are traps.

Not these.

For steady monthly income, my "9%+ Monthly Payer Portfolio" excels.

Focus: high yield, frequency, sleep-easy coverage - no strains.

No principal erosion needed; rich income sustains retirement.