This High-Yield Portfolio Will Beat the Market
|Altria (NYS: MO)|
|Philip Morris (NYS: PM)|
|National Grid (NYS: NGG)|
|Annaly Capital Management (NYS: NLY)|
|Frontier Communications (NYS: FTR)|
|France Telecom (NYS: FTE)|
|Vodafone Group (NYS: VOD)|
|Investment In SPY|
|Return vs SPY|
Source: Capital IQ, a division of Standards and Poor's, August 2, 2011.
Over the past week, the S&P 500 fell 6.75%. As the market fell, our portfolio outperformance rose from 3.61% to 7.99%, showing the strength of dividend stocks versus the general market. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's only been twenty-four weeks. I firmly believe the results will bear us out, though.
Movers & shakers
Of our stocks, the biggest mover in the portfolio the past week was France Telecom, which fell 5.5% after rising 6.3% in the week prior. Frontier and National Grid also declined, falling 4% and 2%, respectively.
There are five upcoming dividends for the portfolio:
- Bristol Meyers Squibb will pay a dividend of $0.33 on August 1. The ex-dividend date was June 29.
- Vodafone will pay a dividend of GBP 0.605 on August 5. The ex-dividend date was June 1.
- National Grid will pay a dividend of $1.9005 on August 17. The ex-dividend date was June 3, 2011.
- Southern Co. will pay a dividend of $0.4725 on September 6. The ex-dividend date is July 28, 2011.
- Eli Lilly will pay a dividend of $0.49 on September 9, 2011. The ex-dividend date is August 11.
Vodafone announced last week that it will be receiving its first dividend from Verizon Wireless on Jan. 31, 2012. In the past, the joint venture partners had agreed that all Verizon Wireless' excess cash should go toward paying off the company's debt. Vodafone plans on using its $4.5 billion to pay down a billion dollars of debt and then pay out the rest as a dividend. The market reacted by boosting the shares 5% before the shares fell with the general market.
My Foolish bottom line
I'm highly confident in this portfolio's ability to crush the market over the next decade, and that's why I put $10,000 of my personal cash into these stocks. My strategy is simple. I'm buying strong companies with outsized dividends, reinvesting those dividends, and holding them for the long run. Over the coming year, I'll track my performance, update you on when I'm going to reinvest all my dividends, and keep you abreast of news affecting these companies.
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, including one named by a senior retail analyst as "the dividend play of a lifetime." Tens 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 Dan Dzombakcan be found on his Twitter account:@DanDzombak. He owns shares of Altria, Philip Morris, National Grid, Annaly Capital, Frontier, Southern Co, France Telecom, Vodafone, Eli Lilly, and Bristol-Myers Squibb.The Motley Fool owns shares of Altria Group, Chimera Investment, Philip Morris International, and Annaly Capital Management.Motley Fool newsletter serviceshave recommended buying shares of Southern, France Telecom, Philip Morris International, Vodafone Group, and National Grid. 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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