The World's Best Dividend Portfolio

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Last month, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offer triple the yield of the average S&P 500 stock. You can read all the details here. Now let's check out the results so far.

Company

Cost Basis

Shares

Recent Price

Total Value

Return

Southern (NYS: SO) $39.7125.0818$39.80$998.180.2%
Exelon (NYS: EXC) $41.8223.818$44.64$1,063.246.7%
National Grid (NYS: NGG) $48.9020.3693$49.52$1,008.691.3%
Philip Morris International (NYS: PM) $68.4914.5429$72.58$1,055.526%
Annaly Capital (NYS: NLY) $18.2455$17.37$955.38(4.8%)
Frontier Communications (NYS: FTR) $7.88126.4243$7.57$957.39(3.9%)
Plum Creek Timber (NYS: PCL) $38.4226$38.60$1,003.600.5%
Brookfield Infrastructure Partners (NYS: BIP) $26.1238.2825$25.35$970.46(2.9%)
Vodafone (NAS: VOD) $26.5237.5566$27.01$1,014.401.8%
Seaspan (NYS: SSW) $14.6169$14.07$970.83(3.7%)
Cash $45.06 $45.06 
Dividends Receivable $11.85 $11.85 
Total Portfolio   $10,054.590.7%
Investment in SPY    1.6%
Relative Performance (Percentage Points)    (0.9)

Source: Capital IQ, a division of Standard & Poor's.

The portfolio has underperformed the S&P 500 in its first few weeks, but it's still net positive despite a rough time for the markets. I'm not particularly concerned about short-term fluctuations, though. This dividend portfolio is designed to do better when the market is performing poorly, and there's a good chance we'll see that theory put to the test later this year, especially if Congress enacts any serious austerity measures. In the meantime, we'll cash our dividend checks and wait for an opportunity to reinvest those proceeds.

Dividends and earnings announcements
Although we bought into many of these stocks (Southern, Exelon, Frontier, Brookfield) a bit late to get the June dividends, often it's better to purchase dividend stocks when they're not approaching the ex-dividend date. Nevertheless, we have a couple bits of dividend and earnings news:

  • Southern Company goes ex-dividend today, and pays out its dividend of $0.4725 per share on Sept. 5.
  • Plum Creek reported earnings that missed analysts' expectations.
  • Southern Company saw earnings grow 18%, beating analysts' estimates.
  • Exelon reported a 39% jump in earnings and raised its full-year earnings forecast range to between $4.05 and $4.25 per share.
  • Philip Morris reported stellar earnings.

Dividend investors need to look long-term and not worry about an earnings miss or here. So I'm pleased with the earning reports of these companies. In the coming week we'll see Annaly report earnings, as well as Frontier.

Foolish bottom line
I've been a fan of big dividends for a while, and I think this portfolio will outperform the market over time through the power of dividends. As I promised in the original article, I'll be holding these stocks for at least a year and will continue to track the portfolio over the course of the year, including news on these companies.

If you like dividends, consider the 10 tickers above along with the 13 names from a free report from Motley Fool's expert analysts called "13 High-Yielding Stocks to Buy Today." Hundreds of thousands have requested access to this report, and today I invite you to download it at no cost to you. To get instant access to the names of these 13 high yielders, simply click here -- it's free.

At the time this article was published Jim Royal, Ph.D., owns shares of every company mentioned here. The Motley Fool owns shares of Brookfield Infrastructure, Philip Morris, Seaspan, and Annaly. The Fool owns shares of and has written puts on Plum Creek Timber.Motley Fool newsletter serviceshave recommended buying shares of Philip Morris, National Grid, Exelon, Southern, Brookfield Infrastructure, and Vodafone; writing a covered straddle position on Seaspan; and creating a covered strangle position in Exelon. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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