This High-Yield Portfolio Will Beat the Market

Motley Fool Staff
Updated

Thirty-seven weeks ago, I invested my cold, hard cash into 10 high-yield dividend stocks I believe will beat the market. Let's see the results so far.

Company

Average Cost

Shares

Recent Price

Total Value

Return

Altria (NYS: MO)

$24.86

40

$27.10

$1,084.00

9.01%

Philip Morris (NYS: PM)

$61.83

16

$68.76

$1,100.16

11.21%

National Grid (NYS: NGG)

$45.63

22

$49.15

$1,081.30

7.71%

Annaly Capital Management (NYS: NLY)

$17.55

57

$16.66

$949.62

(5.07%)

Frontier Communications (NYS: FTR)

$8.71

149

$6.04

$899.96

(30.65%)

Southern

$37.87

26

$42.67

$1,109.42

12.67%

France Telecom (NYS: FTE)

$22.23

45

$17.09

$769.05

(23.12%)

Vodafone Group

$28.69

38

$27.40

$1,041.20

(4.50%)

Eli Lilly

$34.48

29

$37.22

$1,079.38

7.95%

Bristol-Myers Squibb

$25.37

39

$31.31

$1,221.09

23.41%

Cash

$91.12

Dividends Receivable

$0.00

Total Portfolio

$10,426.30

4.26%

Investment In SPY

(7.47%)

Return vs SPY (percentage points)

+11.74

Source: S&P Capital IQ, as of Nov. 1.

Since my last report, the SPDR S&P 500 (NYS: SPY) rose 1.28%. Our portfolio did not rise as much, with our outperformance dropping slightly from beating the market by 12.99 percentage points to an 11.74-point advantage. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's been only eight months.

Movers and shakers
Of our stocks, the biggest mover in the portfolio since our last report was France Telecom, which fell 5.16%.

Money!
There are three upcoming dividends for the portfolio:

  • Eli-Lilly will pay a dividend of $0.49 per share on Dec. 9. The ex-dividend date is Nov. 10.

  • Southern will pay a dividend of $0.4725 per share on Dec. 6. The ex-dividend date is Nov. 3.

  • Frontier will pay a dividend of $0.1875 per share on Dec. 30. The ex-dividend date is Dec. 7.

Earnings

Purchase
I said a few weeks ago that once our cash built up, I planned on buying a share of Philip Morris. The company is one of the strongest in the world, earning the monikers "disaster-proof" and "unbeatable" from me. It is the stock I'd like to anchor the portfolio, and as such, I'll be buying a share tomorrow at noon.

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 these 10 tickers along with the 11 names from a brand new free report from The Motley Fool's expert analysts called "11 Rock-Solid Dividend Stocks." To get instant access to the names of these 11 dividend stocks, click here -- it's free.

At the time thisarticle was published Dan Dzombakcan be found on his Twitter account:@DanDzombak. He owns shares of Altria, Philip Morris, National Grid, Annaly Capital, Frontier, Southern, 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 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.

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

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