The World's Best Dividend Portfolio
In June 2011, I invested my money equally in a selection of 10 high-yield dividend stocks. With a year of success behind me, I added even more money to the portfolio this month. You can read all the details. Now let's check out the results so far.
Company | Cost Basis | Shares | Yield | Total Value | Return |
|---|---|---|---|---|---|
Southern | $39.71 | 25.0818 | 4.2% | $1,183.86 | 18.9% |
Exelon (NYS: EXC) | $41.36 | 23.818 | 5.6% | $1,082.12 | (9.2%) |
National Grid (NYS: NGG) | $48.90 | 20.3693 | 5.7% | $1,089.35 | 9.4% |
Philip Morris International (NYS: PM) | $68.49 | 14.5429 | 3.4% | $1,307.41 | 31.3% |
Annaly Capital (NYS: NLY) | $17.92 | 65.5 | 13.1% | $1,103.68 | (6%) |
Frontier Communications | $7.88 | 126.4243 | 9.9% | $503.17 | (49.5%) |
Plum Creek Timber | $38.42 | 26 | 4.2% | $1,039.48 | 4.1% |
Brookfield Infrastructure Partners | $26.12 | 38.2825 | 4.5% | $1,243.80 | 24.4% |
Vodafone | $26.52 | 37.5566 | 5% | $1,058.72 | 6.3% |
Seaspan | $14.90 | 76 | 6.3% | $1,198.52 | 5.8% |
AT&T (NYS: T) | $35.20 | 28.4 | 5% | $990.31 | (0.9%) |
Retail Opportunity Investments | $12.20 | 81.95 | 4.3% | $1,001.43 | 0.2% |
Annaly Preferred C | $25.92 | 38.5 | 7.3% | $1,002.54 | 0.5% |
Cash | $99.31 | ||||
Dividends Receivable | $115.23 | ||||
Original Investment | $12,983.97 | ||||
Total Portfolio | $14,018.91 | 8% | |||
Investment in SPY (Including Dividends) | 4.5% | ||||
Relative Performance (Percentage Points) | 3.5 |
Source: S&P Capital IQ.
Here's to a prosperous second year! Earlier this week, I added three stocks and $3,000 to the portfolio, following its one-year anniversary. You can read all about it in this article. Because of the mathematics in the return calculations, you'll see a drop in the total return figures from last week, both in our portfolio and our S&P reference. That's due largely to increased investment and not the actual performance of the S&P or our portfolio. For now, it's important to look at the relative performance, and we still see outperformance of 3.5 points, up from 3.1 last week. Our blended yield remains at 5.8%.
Fellow Fool Alex Planes breaks down the numbers on outperformer Philip Morris, including its low payout ratio, relative to other key players in the space. That's a reason to like this international purveyor of smokes. Alex gives you more reasons in his article.
Annaly came out with its quarterly take on the market, and as usual, it's an interesting read. The company noted that Operation Twist would continue until the end of the year, and that the Federal Reserve reiterated that its near-zero rate policy will continue till late 2014 while it downgraded its estimates for the economy. Annaly added, "The market seemed to be hoping for more clues on whether 'QE3' might be a reality, but that will likely have to wait until the Aug. 1 meeting." Fool Dan Caplinger provides his take on this sector.
One of our newest additions to the portfolio, AT&T, is beginning a program that tracks stolen mobile devices, deterring thieves from selling the loot. The program would prevent the devices from being reactivated on AT&T's network, and the company is working to expand the program to operate on the networks of rivals. According to the FCC, one in three thefts in the U.S. last year involved a stolen phone.
Low natural-gas prices continue to plague Exelon. Cheaper nat-gas tends to reduce wholesale prices, and Exelon is a big player in that space. But I don't expect gas prices to be low forever. When they rise, expect the stock to follow suit. In the meantime, we'll sit on Exelon's big dividend of 5.6%.
Dividends and other announcements
We're in earnings season, and we have some dividend news.
National Grid went ex-dividend on May 30 and pays out $2.017 per share on Aug. 15.
Philip Morris went ex-dividend on June 25 and paid out $0.77 per share on July 12.
Vodafone went ex-dividend on June 6 and pays out $1.015 per share on Aug. 1.
Annaly went ex-dividend on June 27 and pays out $0.55 per share on July 26.
All that, of course, means more money coming into our pockets.
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 probably 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're craving more dividend payers, I invite you to read the free report from the Motley Fool titled "3 American Companies Set to Dominate the World." Today I invite you to download it at no cost to you. Get instant access to the names of these dominant dividend stocks -- it's free.
The article The World's Best Dividend Portfolio originally appeared on Fool.com.
Jim Royal, Ph.D., owns shares of the portfolio stocks mentioned in the table. The Motley Fool owns shares of Seaspan, Brookfield Infrastructure, Retail Opportunity Investments, and Annaly.Motley Fool newsletter serviceshave recommended buying shares of Vodafone, Retail Opportunity Investments, National Grid, Brookfield Infrastructure, Exelon, Annaly, and Southern, as well as writing a covered straddle position in Exelon and writing covered calls on Seaspan. 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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