The World's Best Dividend Portfolio

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In June, 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$42.11$1,056.196.0%
Exelon (NYS: EXC) $41.8223.818$42.35$1,008.691.3%
National Grid (NYS: NGG) $48.9020.3693$48.74$992.80(0.3%)
Philip Morris International (NYS: PM) $68.4914.5429$64.96$944.71(5.2%)
Annaly Capital (NYS: NLY) $18.2455$17.56$965.80(3.7%)
Frontier Communications (NYS: FTR) $7.88126.4243$6.27$792.68(20.4%)
Plum Creek Timber (NYS: PCL) $38.4226$34.80$904.80(9.4%)
Brookfield Infrastructure Partners (NYS: BIP) $26.1238.2825$25.50$976.20(2.4%)
Vodafone (NAS: VOD) $26.5237.5566$24.58$923.14(7.3%)
Seaspan (NYS: SSW) $14.6169$12.13$836.97(17.0%)
Cash 

$93.27

 

$93.27

 
Dividends Receivable 

$37.10

 

$37.10

 
Total Portfolio   $9,532.36(4.5%)
Investment in SPY    (12.7%)
Relative Performance    8.2%

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

The portfolio has moved back into negative territory, dropping sharply from last week's break into positive territory. The market hit everything hard, but our portfolio still outperformed the overall market, with outperformance rising by 2 percentage points from last week. Eight of our 10 picks are still beating the S&P. 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. At today's price, the stock is yielding 12%. 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 of $0.35 a share on Sept. 29.
  • Frontier went ex-dividend on Sept. 7 and pays out $0.1875 cents per share on Sept. 29.
  • Philip Morris goes ex-div on Sept. 27 and pays out its newly raised dividend of $0.77 on Oct. 11.
  • And everyone's favorite dividend play, Annaly, goes ex-div on Sept. 28 and pays its dividend of $0.60 on Oct. 27.

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 likely 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 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, Seaspan, Annaly, and Philip Morris. The Fool owns shares of and has written puts on Plum Creek.Motley Fool newsletter serviceshave recommended buying shares of National Grid, Philip Morris, Southern, Brookfield Infrastructure, Vodafone, and Exelon; creating a covered strangle position in Exelon; and creating a write covered straddle position in 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.

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

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