The World's Best Dividend Portfolio
|Southern (NYS: SO)||$39.71||25.0818||$42.07||$1,055.19||5.9%|
|Exelon (NYS: EXC)||$41.82||23.818||$42.91||$1,022.03||2.6%|
|National Grid (NYS: NGG)||$48.90||20.3693||$49.32||$1,004.61||0.9%|
|Philip Morris International (NYS: PM)||$68.49||14.5429||$68.29||$993.13||(0.3%)|
|Annaly Capital (NYS: NLY)||$18.24||55||$17.92||$985.60||(1.8%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||$7.03||$888.76||(10.8%)|
|Plum Creek Timber (NYS: PCL)||$38.42||26||$36.94||$960.44||(3.9%)|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||$27.06||$1,035.92||3.6%|
|Vodafone (NAS: VOD)||$26.52||37.5566||$26.11||$980.60||(1.5%)|
|Seaspan (NYS: SSW)||$14.61||69||$13.59||$937.71||(7.0%)|
|Investment in SPY||(6.1%)|
|Relative Performance (percentage points)||+6.2|
Source: Capital IQ, a division of Standard & Poor's.
The portfolio has now broken into positive territory, against the S&P's decline of 6.1% over the same time period, for outperformance of 6.2 percentage points. Eight of our 10 picks are beating the S&P. Despite the gains for the week, we actually lost ground on the S&P, which we were beating by 7.1 percentage points last week. 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.
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:
- 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.
Some unfortunate news for income investors in Vodafone. Its joint venture, Verizon Wireless, will not pay a recurring dividend to Vodafone and instead will use the funds to acquire spectrum and make acquisitions. Vodafone will still receive a $4.5 billion dividend check in January, most of which will be passed on to investors in the form of a special dividend. But the lack of a recurring dividend dents the thesis for income investors, even as the company continues to accrue value in its joint venture. I'm less than enthused about this development.
Philip Morris news
The big news for Philip Morris was positive, as the company bumped up its quarterly dividend by 20%. That's a great performance and testament to the strength of the company's global business. And it certainly exceeded my expectations. So that's some positive news to counter the bad from Vodafone.
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. Europe continues to be an absolute mess, and continued bad news will probably have stocks plunging again, and if they do, I'll be inclined to pick more shares up.
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 I've mentioned here along with the 13 names from a free report from The 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. Get instant access to the names of these 13 high yielders -- 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 in Exelon and Seaspan. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't 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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