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. Now let's check out the results so far.
|Philip Morris International (NYS: PM)||$68.49||14.5429||4%||$1,111.80||11.6%|
|Annaly Capital (NYS: NLY)||$18.24||65.5||14%||$1,072.24||(8.6%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||14.9%||$635.91||(36.2%)|
|Plum Creek Timber||$38.42||26||4.4%||$1,008.54||1%|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||4.9%||$1,094.11||9.4%|
|Seaspan (NYS: SSW)||$14.61||69||5.3%||$962.55||(4.5%)|
|Investment in SPY|
Source: S&P Capital IQ.
Our total portfolio performance improved overall from the previous week, moving from 0% to 0.5% this week. That's a solid gain, but it was outpaced by the even brisker move on the S&P, leaving our portfolio underperforming by 1.3 percentage points. We have four stocks outperforming the index. But I'm confident in the long-run nature of this portfolio, and I fully expect it to outperform. If we see a downward move in the S&P, we'll quickly gain the upper hand again, I think.
Thanks to a reader suggestion, I'm now including the yield on each stock in the portfolio. For reasons of space, I've eliminated the column on my original price paid, but that can be figured using the cost basis and number of shares.
Thanks also for your suggestions so far with what to do with some $200 that will reach the portfolio by early February. You've given me a lot of meat to chew on.
As we head into a tenuous and uncertain 2012, I'm glad to be in dividend stocks because of their lower downside volatility. Brookfield Infrastructure should provide us good stability, with its high level (80%) of contractually obligated cash flows. And even though mortgage REITs are suffering under some uncertainty, Annaly still looks like a good place to be for 2012, I think. But fellow Fool John Maxfield disagrees. What do you think, Fools? You can see a breakdown of how Annaly boosts its returns.
Dividends and other announcements
Going into the new year, the news has been pretty light. But there have been a few developments and some year-end recaps:
- In news affecting Philip Morris, the Australian government has lashed out at rival cigarette maker British American Tobacco for using the nation's symbol, the kangaroo, on products sold in Europe. Australia is introducing a law that all cigarettes must be sold in plain olive-green packs, a law that the major tobacco powers are challenging in court. Some analysts are worried that the laws may spread to other high-growth international markets, hurting growth at Philip Morris.
- Seaspan reported the results of its tender offer at $15 per share. The offer was oversubscribed by nearly double, but the company will purchase only 11.3 million shares, with priority going to holders of less than 100 shares. We continue to hold the shares here.
- Frontier has plenty of work ahead of it in 2012. It's looking to expand its business Ethernet coverage and is pushing into wireless broadband. Fellow Fool Dan Radovsky runs down what to look for during the rest of the year.
- National Grid went ex-dividend on Dec. 2 and pays out $1.0967 per share on Jan. 18.
- Frontier paid out $0.1875 per share on Dec. 29.
- 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.
- Philip Morris went ex-div on Dec. 20 and paid out $0.77 a share on Jan. 10.
- Annaly went ex-dividend on Dec. 27 and pays out $0.57 per share on Jan. 26.
All that, of course, means more money coming into our pockets shortly and more money to reinvest.
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 more shares up.
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 these 10 tickers along with the 11 names from a brand-new free report from The 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 for 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, and has created a covered strangle position on Plum Creek.Motley Fool newsletter serviceshave recommended buying shares of Exelon, National Grid, Philip Morris, Vodafone, Southern, and Brookfield Infrastructure, as well as 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 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.
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