The World's Best Dividend Portfolio
|Southern (NYS: SO)||$39.71||25.0818||$41.36||$1,037.38||4.2%|
|Exelon (NYS: EXC)||$41.82||23.818||$42.94||$1,022.74||2.7%|
|National Grid (NYS: NGG)||$48.90||20.3693||$50.20||$1,022.54||2.7%|
|Philip Morris International (NYS: PM)||$68.49||14.5429||$68.55||$996.92||0.1%|
|Annaly Capital (NYS: NLY)||$18.24||55||$17.51||$963.05||(4%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||$6.89||$871.06||(12.6%)|
|Plum Creek Timber (NYS: PCL)||$38.42||26||$36.42||$946.92||(5.2%)|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||$26.54||$1,016.02||1.6%|
|Vodafone (NAS: VOD)||$26.52||37.5566||$26.03||$977.41||(1.9%)|
|Seaspan (NYS: SSW)||$14.61||69||$13.50||$931.50||(7.6%)|
|Investment in SPY||(7.9%)|
|Relative Performance (percentage points)||+7.1|
Source: Capital IQ, a division of Standard & Poor's.
Amazingly, nine of our 10 picks are doing better than the S&P. The portfolio is now outperforming the S&P 500 by 7.1 percentage points in its first two months or so, and our portfolio is down mildly since inception. That outperformance is up mildly from last week's outperformance of 6.4 points, and it's a good reminder that the numbers can change quickly. But that performance is also a reminder of the stability of dividend payers over time -- good downside protection and continued income but also less upside volatility.
Although we're ahead now, I'd prefer not to have an overall loss in the portfolio. I'm not particularly concerned about short-term fluctuations, though. In the meantime, we'll cash our dividend checks and wait for an opportunity to reinvest those proceeds. In particular, Frontier is bringing the average return down, meaning the stock could be an attractive place to add reinvested dividends. Which stock do you think looks the most attractive now?
Dividends and earnings announcements
We're moving out of dividend season, and we have a few bits of news:
- We collected dividend checks from Southern and Exelon this week, and those numbers are included in the results above.
- Brookfield Infrastructure went ex-dividend on Aug. 29, with a payday on Sept. 29.
- Frontier went ex-dividend on Sept. 7 and pays out $0.1875 per share on Sept. 29.
It's fun to sit back and get paid, and with the market volatility, we might have a good chance to reinvest those dividends at good prices. Any continued bad news out of Europe will likely have stocks plunging again, and if they do, I'll be inclined to pick up more shares.
The safer alternative to bonds
Yesterday, I wrote an article on dividend stocks called "The Safer Alternative to Bonds." In it, I detail three major trends that are playing havoc with bond investors, and why investors should be focused on dividend stocks like we are. I also offer three ways to play the dividend game, so check out the article.
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 Annaly, Seaspan, Philip Morris, and Brookfield Infrastructure. The Fool owns shares of and has written puts on Plum Creek.Motley Fool newsletter serviceshave recommended buying shares of Vodafone, National Grid, Brookfield Infrastructure, Philip Morris, Exelon, and Southern, as well as writing covered strangle positions on Exelon and Seaspan. 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.
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