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.
Philip Morris International
Plum Creek Timber
Brookfield Infrastructure Partners
Retail Opportunity Investments
Annaly Preferred C
Investment in SPY (Including Dividends)
Relative Performance (Percentage Points)
Our portfolio was up a bit for the week, moving from 7.8% to 8.2%. The S&P did slightly worse, so we moved from down 1.2 percentage points to down 0.7. Given the ongoing uncertainty over how the U.S. tax code will treat dividends next year, it's not too hard to fathom. It would be nice to have some certainty, but the long-term track record of dividend stock outperformance speaks for itself.
Our portfolio is now yielding 6.1% -- much higher than the S&P while we wait for our gains. We expect this figure to come down, as Annaly will probably cut its dividend this quarter. We should find out officially in a few weeks, with an announcement and then the ex-dividend at the end of the month. Exelon could cut its payout, too, and I've already said earlier this year that I would sell Frontier at the right price, because of its ongoing fundamental weakness. Frontier just went ex-dividend on Wednesday, and we should see that money hit the account by the 31st -- maybe just escaping the clutches of the 2013 taxman.
One stock that shouldn't be pulling down our average yield is Seaspan. I added six more shares from our cash stash at $16.61 per share. The company announced that it's selling more preferred shares as it expands its fleet of container ships. We'll have another $100 in cash in the account by the start of February, so it's not too soon to start thinking of what to buy.
Fellow Fool Doug Ehrman discusses what the fiscal cliff means for Annaly in this article.
For a beautiful breakdown of Exelon's business in graphics, take a look at Fool Justin Loiseau's article on the nation's largest power generator.
Dividends and earnings announcements
Here is the recent news on earnings and dividends:
- Southern went ex-dividend on Nov. 1 and paid out $0.49 per share on Dec. 6.
- Retail Opportunity Investments went ex-dividend Nov. 9 and paid out $0.14 per share on Nov. 30.
- Exelon went ex-dividend Nov. 13 and pays out $0.525 per share on Dec. 10.
- Vodafone went ex-dividend on Nov. 20 and pays out $0.519 per share on Feb. 6.
- Brookfield Infrastructure went ex-dividend on Nov. 28 and pays out $0.375 per share on Dec. 31.
- National Grid went ex-dividend on Nov. 28 and pays out nearly $1.15 per share on Jan. 16.
- Annaly Series C went ex-dividend on Nov. 29 and pays out almost $0.48 per share on Dec. 31.
- Frontier went ex-dividend on Dec. 5 and pays out $0.10 per share on Dec. 31.
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 continue to track and report on the portfolio's progress, including news on these companies.
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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 Brookfield Infrastructure Partners, Annaly Capital Management, and Seaspan. Motley Fool newsletter services recommend Brookfield Infrastructure Partners, Exelon, and Seaspan. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.