The World's Best Dividend Portfolio
|Southern (NYS: SO)||$39.71||25.0818||$43.32||$1,086.54||9.1%|
|Exelon (NYS: EXC)||$41.82||23.818||$44.59||$1,062.04||6.6%|
|National Grid (NYS: NGG)||$48.90||20.3693||$50.57||$1,030.08||3.4%|
|Philip Morris International (NYS: PM)||$68.49||14.5429||$70.79||$1,029.49||3.4%|
|Annaly Capital (NYS: NLY)||$18.24||55||$16.37||$900.35||(10.3%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||$5.73||$724.41||(27.3%)|
|Plum Creek Timber||$38.42||26||$37.50||$975.00||(2.4%)|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||$25.38||$971.61||(2.8%)|
|Vodafone (NAS: VOD)||$26.52||37.5566||$28.06||$1,053.84||5.8%|
Investment in SPY
Source: S&P Capital IQ.
The portfolio burst into positive territory last week but settled back into slightly negative this week. The S&P has closed the gap on this dividend portfolio to just 0.3 percentage points. But that fits what I've been saying all along: We'll have good downside protection and continued income but also less upside volatility, meaning we're likely to underperform any big market rallies. We're still pumping out those dividends whichever way the market goes.
Because of the market's strong move, we have just five stocks outperforming the S&P. In aggregate, of course, we're still outperforming.
I still haven't added to my Annaly position, because of the Fool's trading restrictions. (And I've missed out on a nice run, too.) Whenever I can, I plan to take the almost $175 in available cash to buy Annaly shares. The stock has been hurt recently, but I still think it's a great place to be, as I explain here. While not all the news has been good from the mortgage REIT sector, Annaly still looks poised to pump out solid dividends. Because of upcoming articles, it may still be awhile before I make this trade.
Dividends and earnings announcements
We're moving into dividend and earnings season, and we have a few bits of news:
- Annaly reported earnings earlier this week, and the company has been taking steps to navigate the volatile environment and doing it well, unlike some peers.
- Frontier reported earnings that seemed to disappoint the market, judging from its 7.5% drop yesterday. But it did show revenues in line with analysts' estimates, while profit was off by a penny. And the conversion of newly acquired lines is moving along, with all 13 states converted to the legacy financial system. For the third quarter, the $0.1875 dividend represents about 71% of free cash flow, whereas for the year, the company has paid out about 75% of free cash flow as dividends. Shares now offer a 13.1% yield.
- Our containership company Seaspan reported earnings on Tuesday. The company continued to grow cash available to shareholders, bumping up that number by 22.5% to $63.9 million. That's the number dividend investors want to focus on. Vessel utilization was nearly 100%, and the company continues to expand its fleet, taking delivery of three new ships, to bring its fleet to 65 vessels.
- Southern Company goes ex-div on Nov. 7 and distributes $0.4725 per share on Dec. 6.
- Exelon goes ex-div on Nov. 15 and pays out $0.525 per share on Dec. 9.
- Plum Creek goes ex-div on Nov. 10 and with a dividend of $0.42 per share on Nov. 30.
- Seaspan goes ex-div on Nov. 9 and distributes $0.1875 per share on Nov. 23 -- just in time for Thanksgiving and Black Friday.
That's four out of our 10 companies going ex-dividend in the next 10 days or so, and that of course means more money coming into our pockets shortly.
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. If they do, I'll be inclined to pick up more shares.
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 11 names from a brand-new free report from Motley Fool's expert analysts called "Secure Your Future With 11 Rock-Solid Dividend Stocks." Today I invite you to download it at no cost to you. To get instant access to the names of these 11 high-yielders, simply click here -- it's free.
At the time this article was published Jim Royal, Ph.D., owns shares of the 10 portfolio stocks mentioned in the table above.The Motley Fool owns shares of Philip Morris, Brookfield Infrastructure, Seaspan, Annaly, and Plum Creek, and has created a covered strangle position on Plum Creek.Motley Fool newsletter serviceshave recommended buying shares of Brookfield Infrastructure, Philip Morris, National Grid, Vodafone, Southern, and Exelon, as well has writing a covered straddle position in Seaspan and a covered strangle position in Exelon. 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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