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, in July 2012, I added even more money to the portfolio. 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.
Company | Cost Basis | Shares | Yield | Total Value | Return |
|---|---|---|---|---|---|
Southern | $39.71 | 25.0818 | 4.2% | $1,154.26 | 15.9% |
Exelon (NYS: EXC) | $41.36 | 28.818 | 5.9% | $967.71 | (18.8%) |
National Grid (NYS: NGG) | $48.90 | 20.3693 | 5.4% | $1,168.18 | 17.3% |
Philip Morris International | $68.49 | 14.5429 | 3.8% | $1,273.81 | 27.9% |
Annaly Capital | $17.79 | 72.5 | 12.4% | $1,160.73 | (10%) |
Frontier Communications | $7.88 | 126.4243 | 8.5% | $595.46 | (40.2%) |
Plum Creek Timber (NYS: PCL) | $38.42 | 26 | 3.8% | $1,112.54 | 11.4% |
Brookfield Infrastructure Partners | $26.12 | 38.2825 | 4.4% | $1,305.82 | 30.6% |
Vodafone | $26.52 | 37.5566 | 5.4% | $1,030.55 | 3.5% |
Seaspan (NYS: SSW) | $15.14 | 89 | 6.3% | $1,472.06 | 9.2% |
AT&T | $35.20 | 28.4 | 5.1% | $996.56 | (0.3%) |
Retail Opportunity Investments (NAS: ROIC) | $12.20 | 81.95 | 4.4% | $1,044.86 | 4.5% |
Annaly Preferred C | $25.98 | 38.5 | 7.4% | $994.07 | (0.6%) |
Cash | $60.34 | ||||
Dividends Receivable | $12.29 | ||||
Original Investment | $12,983.97 | ||||
Total Portfolio | $14,349.23 | 10.5% | |||
Investment in SPY | 9.6% | ||||
Relative Performance | 0.9 |
Source: S&P Capital IQ.
Our portfolio was up slightly for the week, moving from 10.3% to 10.5%. But the S&P moved up even more, decreasing our lead from 1.8 percentage points to 0.9. Our blended yield remained at 5.8%. I'm confident in the long-run performance of this dividend portfolio, and I expect time will bear us out. With much of the global economy in recession, dividends should outperform. If I have to have my money somewhere, dividend stocks are the place.
Is it time to buy National Grid? Fellow Fool Harvey Jones provides his perspective on this U.K.-based utility that offers a 5%-plus yield in this article.
Dividends and earnings announcements
Here is the relevant news about earnings and dividends:
Earnings news:
Retail Opportunity Investments reported some solid quarterly results, with funds from operations of $0.19 per share. The company turned in a stellar 9% increase in same-center cash net operating income and grew occupancy to 93.1%, increasing for the third straight quarter. This company's relatively small property footprint means that it can grow quickly. Unfortunately, its dividend didn't grow this quarter, remaining at $0.14, but I'm confident that CEO Stuart Tanz will start increasing it again soon.
Seaspan continued to see cash available for distribution grow, and this quarter it was up 9.2%. That's great to see since it's where our dividends are paid from. As I noted recently, I expect to see an increased dividend announced in late February, and maybe we'll even get a repeat of last year's tender offer. A buyback could really make shares move. The company also announced that it was looking at further deals that could grow revenue, but revealed few details on the earnings call.
Plum Creek reported earnings growth year over year, moving net income from $50 million to $59 million, on the strength of higher demand for its wood products. Revenue moved up 21% to $354 million. One of the key drivers of its business, housing starts are estimated to be up 25% this year, and the slowly healing housing market should provide a tailwind in the future. That's all good news for this timber REIT.
Things were rough in Exelon's recent quarter. While the company did revise its 2012 earnings estimate upward, to a range of $2.75-$2.95 from $2.55-$2.85, the CEO said that the company might have to cut its dividend in order to maintain an investment-grade credit rating. It would be the first dividend cut since the company was created in 2000. Unsurprisingly, the market sent shares lower on Thursday, by 6%. I would not be surprised to see further declines when the company announces the actual cut.
Dividend news:
Annaly went ex-dividend on Sept. 27 and paid out $0.50 per share on Oct. 29.
AT&T went ex-dividend on Oct. 5 and paid out $0.44 per share on Nov. 1.
Southern went ex-dividend on Nov.r 1 and pays out $0.49 per share on Dec. 6.
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 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 continue to track and report on the portfolio's progress, including news on these companies.
If you like dividends, consider the 13 tickers above along with the nine names from a free report from Motley Fool's expert analysts: "Secure Your Future With 9 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 nine high-yielders, simply click here -- it's free.
The article The World's Best Dividend Portfolio originally appeared on Fool.com.
Jim Royal, Ph.D., owns shares of the 13 portfolio stocks mentioned in the table. The Motley Fool owns shares of Annaly Capital Management, Retail Opportunity Investments, and Seaspan. Motley Fool newsletter services recommend Exelon, National Grid plc (ADR), Retail Opportunity Investments, Southern Company, Seaspan, and AT&T.; 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.
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