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 in July 2012. 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% | $1,172.32 | 17.7% |
Exelon | $41.36 | 28.818 | 3.6% | $990.19 | (16.9%) |
National Grid | $48.90 | 20.3693 | 5.7% | $1,180.20 | 18.5% |
Philip Morris International | $68.49 | 14.5429 | 3.7% | $1,349.29 | 35.5% |
Ryman Hospitality | $44.93 | 24.7 | 4.4% | $1,135.95 | 2.4% |
Plum Creek Timber | $38.42 | 26 | 3.2% | $1,346.28 | 34.8% |
Brookfield Infrastructure Partners | $26.12 | 38.2825 | 4.5% | $1,448.99 | 44.9% |
Vodafone | $26.75 | 56.7566 | 5.3% | $1,608.48 | 5.9% |
Seaspan | $15.24 | 95 | 6.5% | $1,920.90 | 32.7% |
AT&T | $35.20 | 28.4 | 4.9% | $1,057.90 | 5.8% |
Retail Opportunity Investments | $12.20 | 81.95 | 4.3% | $1,144.84 | 14.5% |
Annaly Preferred C | $25.98 | 38.5 | 7.4% | $989.07 | (0.9%) |
Cash | $291.53 | ||||
Dividends Receivable | $24.71 | ||||
Original Investment | $12,983.97 | ||||
Total Portfolio | $15,660.65 | 20.6% | |||
Investment in SPY (including dividends) | 19.7% | ||||
Relative Performance (percentage points) | 0.9 |
Source: Capital IQ, a division of Standard & Poor's.
The portfolio continued to perform strongly, up 2.5 percentage points from last report, even while the S&P fell. Since June 2011, we've been leading the index by 0.9 percentage points. So it looks like markets are searching for some safe havens in dividend stocks while the broader market suffers somewhat. If and when the market falls, we should outperform.
The yield is still a robust 4.9%, and we have nearly $300 in cash in the portfolio, with almost $25 more on the way in the next 10 days.
The big news for the portfolio this week concerns Vodafone and AT&T. The rumors are swirling that AT&T and Verizon are preparing a joint bid for Vodafone. Verizon would get Vodafone's 45% stake of their joint venture Verizon Wireless, while AT&T would acquire the remaining operations, providing it with global scale. The initial figures suggest a $245 billion deal, the largest takeover ever. That would value shares of Vodafone 40% higher than Monday's closing price. The prospect of a buyout is also why my Special Situations portfolio acquired options in Vodafone. You can read through my more detailed reasoning in the previous link.
Fellow Fool Alex Planes has an intriguing take on Southern and Exelon in the following article. And it should be of concern to investors who are in traditionally high-yield utilities for their dividends. Alex notes Southern's dividend well exceeds its free cash flow, though both Southern and Exelon have done well at reducing their debt-to-equity ratios over the last few years, even as peers' have increased.
Dividends and earnings announcements
Here is the recent news on earnings and dividends:
Dividend news:
Frontier went ex-dividend on March 6 and paid out $0.10 per share on March 28.
Brookfield Infrastructure went ex-dividend on Feb. 26 and paid out $0.43 per share on March 29.
Annaly Series C went ex-dividend on Feb. 27 and paid out almost $0.48 per share on April 1.
ROIC went ex-dividend on March 13 and paid out almost $0.15 per share on March 29.
All that, of course, means more money in 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 more bad news will likely have stocks plunging again. And 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.
If you like dividends, consider the 12 tickers above along with the nine names from a brand-new free report from Motley Fool's expert analysts called "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 12 portfolio stocks mentioned in the table and is short April $20 calls on Seaspan. The Motley Fool recommends Brookfield Infrastructure, Exelon, National Grid, Retail Opportunity Investments, Seaspan, Southern, and Vodafone. It owns shares of Brookfield Infrastructure, Philip Morris, Retail Opportunity Investments, Ryman Hospitality, and Seaspan. 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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