This High-Yield Portfolio Will Beat the Market
|Altria (NYS: MO)||$24.86||40||$26.87||$1,074.80||8.09%|
|Philip Morris (NYS: PM)||$61.83||16||$67.91||$1,086.56||9.83%|
|National Grid (NYS: NGG)||$45.63||22||$49.33||$1,085.26||8.11%|
|Annaly Capital Management (NYS: NLY)||$17.55||57||$18.16||$1,035.12||3.48%|
|Frontier Communications (NYS: FTR)||$8.95||137||$7.00||$959.00||(21.79%)|
|Southern Co. (NYS: SO)||$37.87||26||$42.36||$1,101.36||11.86%|
|France Telecom (NYS: FTE)||$22.23||45||$16.30||$733.50||(26.68%)|
|Vodafone Group (NYS: VOD)||$28.69||38||$25.64||$974.32||(10.63%)|
|Eli Lilly (NYS: LLY)||$34.48||29||$37.52||$1,088.08||8.82%|
|Bristol-Myers Squibb (NYS: BMY)||$25.37||39||$30.72||$1,198.08||21.09%|
|Investment In SPY||(7.41%)|
|Return vs. SPY (percentage points)||+11.86|
Source: Capital IQ, a division of Standards and Poor's. As of Sept. 19.
Over the past week, the S&P 500 rose 3.8%. As the market rose, our portfolio outperformance fell, moving from beating the market by 12.81 percentage points to beating it by 11.86 points. 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 six months. I firmly believe the results will bear us out.
Movers and shakers
Of our stocks, the biggest mover in the portfolio the past week was Bristol-Myers Squibb, which rose 5.34%.
As I expected, Philip Morris announced an increase of its dividend last week. What I didn't expect was the size of it, a 20.3% increase to $0.77 a share per quarter for a $3.08 annual dividend. At yesterday's close, that puts the yield at 4.5%. Philip Morris is beginning to build a track record of dividend increases similar to its former parent company, Altria, which has increased its dividend 45 times in the last 42 years, leading it to crush the market. As I've written before, "It's the high, sustainable, and increasing dividends that make Altria and Philip Morris two of my favorite stocks." The recent weakness is a great time to add shares.
There are four upcoming dividends for the portfolio:
- France Telecom will pay a dividend of $0.85 per share on Sept. 29. The ex-dividend date was Aug. 30.
- Frontier Communications will pay a dividend of $0.1875 per share on Sept. 30. The ex-dividend date was Sept. 7.
- Altria will pay a dividend of $0.41 per share on Oct. 11. The ex-dividend date was Sept. 13.
- Philip Morris International will pay a dividend of $0.77 per share on Oct. 11. The ex-dividend date is Sept. 23 .
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 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.