The World's Best Dividend Portfolio
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.
|Southern (NYS: SO)||$39.71||25.0818||$42.20||$1,058.45||6.3%|
|Exelon (NYS: EXC)||$41.82||23.818||$41.89||$997.74||0.2%|
|National Grid (NYS: NGG)||$48.90||20.3693||$49.12||$1,000.54||0.4%|
|Philip Morris International (NYS: PM)||$68.49||14.5429||$71.02||$1,032.84||3.7%|
|Annaly Capital (NYS: NLY)||$18.24||55||$15.68||$862.40||(14.0%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||$5.35||$676.37||(32.1%)|
|Plum Creek Timber||$38.42||26||$34.31||$892.06||(10.7%)|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||$25.11||$961.27||(3.9%)|
|Investment in SPY (including dividends)||(9.0%)|
|Relative Performance (percentage points)||4.0|
Source: S&P Capital IQ, as of Nov. 23.
The portfolio moved further into the red this past week, but the S&P moved down much harder as the euro crisis takes center stage. We upped our outperformance from 2.2 percentage points last week to 4.0 points this week. And even if our capital goes down in the interim, we'll still see dividends while we wait. We have six stocks outperforming the index.
But that fits what I've been saying all along: We'll have better downside protection and continued income but also less upside volatility, meaning we're likely to underperform any big market rallies. But we're still pumping out those dividends whichever way the market goes.
As I mentioned last week, because of the Fool's trading restrictions, I have yet to add to my Annaly position. And I've decided to up my reinvestment in Annaly to $170. While not all the news has been good from the mortgage REIT sector, Annaly still looks poised to pump out solid dividends.
Dividends and other announcements
Going into the holiday season, the news has been pretty light:
- Philip Morris International is suing the Australian government over its plan to remove logos from cigarette packaging. The law requires a plain olive drab packaging, and packs will also have warnings and graphic images showing the results of long-term smoking. The law also arrives with a 25% tax increase on smokes. My Foolish colleague Austin Smith breaks it down more here.
- Seaspan distributed $0.1875 per share on Nov. 23, just in time for Thanksgiving and Black Friday.
- Vodafone announced a special dividend of 4 pence on top of its 3.05 pence interim payout. The stock traded ex-div on Nov. 16, and the money will be paid out on Feb. 3. In dollars, the total payout comes to about $1.12 per U.S. share at current exchange rates.
- Southern Co. went ex-div on Nov. 7 and distributes $0.4725 per share on Dec. 6.
- Exelon went ex-div on Nov. 15 and pays out $0.525 per share on Dec. 9.
- Plum Creek went ex-div on Nov. 10 and yields $0.42 per share on Nov. 30.
All 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, and 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. The Motley Fool owns shares of Seaspan, Brookfield Infrastructure, Annaly, Plum Creek, and Philip Morris. The Fool owns shares of and has created a covered strangle position on Plum Creek. Motley Fool newsletter services have recommended buying shares of Exelon, National Grid, Philip Morris, Vodafone, Southern, and Brookfield Infrastructure; creating a write covered straddle position in Seaspan; and creating a write covered strangle position in Exelon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.