The Most Outstanding Dividend Portfolio I Know

In the coming days, I'm putting $10,000 of my personal portfolio into four dividend stocks and an ETF. Today I'll reveal their names, and show you how to access 13 more high-yielding tickers so you can build the world's most outstanding dividend portfolio for yourself.

Over the past three months, I and several other Fool.com writers have covered many popular dividend stocks from every conceivable angle. We did this in response to Fool.com readers demanding more coverage of these stocks. You asked for it and we have delivered -- but we're not done yet. Not even close!

In a wildly popular November article, two commenters challenged me to back up my recommendations with my own money. Challenge accepted! I'm putting my own money into several of my previous picks, and promising you that I won't sell any of them for the next 365 days -- no pump-and-dump here.

Spend a few days researching these five picks I cite below, along with the stocks from the expertly researched free report you can download at the end of this article -- then pull the trigger on your own portfolio of market-thrashing dividend stocks. I'm not buying for several days, so you have the rare opportunity to get into these stocks before I do.

And it won't cost you a dime to learn what they are.

One outstanding dividend stock
As the cornerstone of my portfolio, I'm buying the stock I named The Most Outstanding Dividend Stock I Know. Faithful readers know I'm talking about Waste Management (NYSE: WM  ) , the leading waste and environmental services company whose primary revenue comes waste collection and landfill storage. I like the company due to the certainty of its industry. Trash will grow as the population grows, unless a significantly larger and sustained effort is made to recycle waste. Even if that effort happens, I feel my bet is perfectly hedged, as Waste Management is also North America's largest recycler. With a 25% position, this will be the largest holding in my dividend portfolio.

The best dividend ETF around
Next might be a peculiar pick for stock-focused readers, but one I'm certain will resonate with dividend lovers worldwide. With 20% of the portfolio, I'm buying a low-cost dividend ETF suggested to me by Fool.com's esteemed Managing Editor Brian Richards. Having started trading as an ETF in 2006, Vanguard Dividend Appreciation ETF (NYSE: VIG  ) is a cheap way to buy large, financially sound U.S. companies with a long history of increasing their dividends year after year. Above-average dividend growth is a prerequisite of my portfolio -- I don't settle for less, and neither should you. I believe dividend growth, much more than current yield, is critical to a successful dividend portfolio. By buying this Vanguard ETF, I'm getting a small piece of roughly 140 American juggernauts such as Pepsi, McDonald's, and Caterpillar that have followed that core requirement of dividend growth for more than 10 years.

American dividend all-stars
Speaking of U.S. stocks, in November I introduced my three favorite American companies, and today I'm tapping two of them to join my personal dividend portfolio. Each is getting a 20% allocation for very different reasons.

First is Yum! Brands (NYSE: YUM  ) , the company behind Taco Bell, Pizza Hut, and KFC. I like their short-but-positive dividend history as I highlight below, but I also like the international growth prospects they add to the portfolio.

Next is steel producer Nucor (NYSE: NUE  ) , which is the best-of-breed in a beat-up industry. There are two strong reasons Nucor will come out sprinting on the other side of downturn:

  1. Their mini-mills break-even at lower capacities than their competitors, giving them a large advantage over when compared to companies like U.S. Steel (NYSE: X  ) , which has significantly higher fixed costs.
  2. Management's "pain sharing" philosophy is aligned with shareholders and employees. CEO pay was cut 43% in 2009 versus 2008 levels, and the company didn't make any layoffs.

Dividend-paying excitement
The last pick from the portfolio comes straight from David Gardner over in Motley Fool Stock Advisor. While David is not known for traditional dividend stocks, but for high-growth companies that swell in value many times over, I'm excited to grab one of his picks for this portfolio as it greatly increases the chance of stock price appreciation, while still meeting my strict dividend guidelines. For the final 15% of my portfolio, I'm buying Hasbro (Nasdaq: HAS  ) .

While it's one of the world's largest makers of toys and games, Hasbro has less than half the market cap of the next largest holding in my portfolio. I'm adding it for many of the same reasons David recommended the stock to Stock Advisor members -- Hasbro's intellectual property (IP) is vast and largely untapped in newer media formats, and is reminiscent of a pre-acquisition Marvel. But I'm not banking on a buyout to make this pick work, or else it wouldn't fit with a dividend strategy. I believe we've only seen the tip of the iceberg in the Transformers and G.I. Joe movies. As they continue to turn their decades-old IP into cash flow, we shareholders will benefit from the stock's rapidly growing dividend payments.

Let's talk dividends
I've talked a lot about the companies, but not about the dividends specifically. Below is a table showing each company's and the combined portfolio's vitals. You can skip this table straight to the final paragraph below it, but there are three quick things you need to know about the portfolio:

  1. The yield is almost 50% higher than the market.
  2. The yield is growing many times faster than the market over the past five and 10 years.
  3. The payout ratio -- or the percent of net income that's paid out as a dividend -- is high, making this a somewhat risky dividend portfolio. If you want, you could tone down the risk by substituting out Nucor with one of the 13 high yielders from the free report at the end of this article.

Ticker

% of Portfolio

Yield

5-Year Dividend CAGR

10-Year Dividend CAGR

Payout Ratio

Waste Management

25%

3.8%

9.3%

61.9%

60%

Yum! Brands

20%

2.0%

32.6%

N/A

36%

Nucor

20%

3.3%

37.8%

25.8%

222%

Vanguard Dividend Appreciation

20%

2.3%

14.9%

N/A

73%

Hasbro

15%

2.2%

23.5%

14.7%

30%

Portfolio Total  

2.6%

22.9%

38.1%

85.1%

Source: Capital IQ, a division of Standard and Poor's. N/A = not available. Totals are weighted by portfolio allocation percentage and exclude not-available figures.

Invest alongside my $10,000
I'm highly confident in this portfolio's ability to crush the market over the next decade, and that's why I'll be pouring $10,000 of my personal cash into these tickers in the next few days. If it maintains historic dividend growth rates, I'll be sitting on a 7.4% annual yield on my original investment in just five short years -- and the yield will only keep growing year after year. This simple fact excited me enough to move new funds into my brokerage account last week.

I think you'll agree that it's time to act. Consider the five tickers above along with the 13 names from a new, free report from Motley Fool's expert analysts called 13 High-Yielding Stocks to Buy Today, including one named by a senior retail analyst as "the dividend play of a lifetime." Tens of thousands have requested access to this report and today I invite you to download it at no cost to you. To get instant access to the names of these 13 high-yielders, simply click here -- it's free.

Jeremy Phillips owns none of the companies mentioned above, but intends to buy all of them as soon as Fool Rules allow.

Hasbro and Nucor are Motley Fool Stock Advisor choices. Motley Fool Options has recommended writing a covered straddle position on Waste Management, which is a Motley Fool Inside Value recommendation and a Motley Fool Income Investor pick. The Fool owns shares of Nucor and Yum! Brands. 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. 


Read/Post Comments (72) | Recommend This Article (278)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 14, 2011, at 1:39 PM, biolasteve wrote:

    Love all these picks, own several myself, thx for the article.

    I know there's always explanation behind the numbers, so picking on a number out of context is no good, but I was surprised to see NUE 222% payout ratio? Isn't that a harbinger of things to come vis a vis dividend growth vs. cuts?

    Or is this a "relative to the industry" type of thing? Any thoughts would be much appreciated!

    steve

  • Report this Comment On January 14, 2011, at 2:15 PM, financeguy85 wrote:

    My comment to this article would be to not fall in love with 5-year dividend growth rates, especially for companies in commodities. As a former owner of Nucor, I also loved its dividend growth rates in excess of 30 percent. However, their most recent increases have been token at best. They won't be raising that dividend by 30 percent anytime soon.

    I also used to own VIG for diversification, but you'd be better off just buying some of the individual names you're fond of. So if you like KO and CAT, buy KO and CAT. The yield on VIG is barely above 2%, probably because its largest holding is Wells Fargo, which barely pays a dividend.

  • Report this Comment On January 14, 2011, at 4:51 PM, vriguy wrote:

    Yes, you can buy the individual companies, but VIG has 140 of them. Keeping track of even 20+ stocks is time consuming, so I come to prefer VIG. I view VIG as a substitute for a broad index ETF as a core holding, not as a dividend play. I get similar diversification but with a higher proportion of high quality blue chip multinationals. There are no speculative stocks in VIG, so this is really for the more conservative sort of investor.

  • Report this Comment On January 14, 2011, at 5:51 PM, shoemaker17 wrote:

    How bout this instead:

    -PM

    -EXC

    -BP

    -BRK.B

    -SDY

  • Report this Comment On January 14, 2011, at 7:21 PM, boldspoo wrote:

    I nabbed VZ about 9 months ago; paying nearly 7% and way undervalued. Since then, it's enjoyed 32% growth and several dividend payouts.

    They continually up their payout (less so recently) and have dramatically solidified their position in the marketplace since then; Androids, iPads, and the iPhone. The jury is still out on their 4G but I'm not too concerned about that near term.

    I'd still recommend it as a buy as the stock still should have a bit of capital gains left in it as well as retaining a high dividend payout.

    Just my 2 cents (with a 7% dividend)

  • Report this Comment On January 14, 2011, at 8:28 PM, Latinus wrote:

    CAGR???

  • Report this Comment On January 14, 2011, at 9:18 PM, nivekluap wrote:

    CAGR is compound annual growth rate.

    KD

  • Report this Comment On January 15, 2011, at 12:03 AM, newageinvestor wrote:

    I bought Hasbro a few months ago, and since then it's done nothing but go down, unlike the other SA pics I bought. Can anybody comment on why?

  • Report this Comment On January 15, 2011, at 2:41 AM, biddy11 wrote:

    Hey how about taking YUM out and adding MO instead.

  • Report this Comment On January 15, 2011, at 4:11 AM, isaquejr wrote:

    Hi, you missed STD! The best bank and the best dividend stock. Highly underrated, can't figure why.

  • Report this Comment On January 15, 2011, at 4:37 AM, Fundament wrote:

    Well, in my opinion WM, YUM, MCD and PEP are the best dividend ideas. Those stocks have a strong brand, huge sales abroad (not WM) as well as a positive long-term growth. Here is a table of 14 dividend stocks with similar characteristics. In average, they grew with 12.76 percent in revenues and with 14.64 percent in earnings per share.

    http://long-term-investments.blogspot.com/2010/09/14-dividen...

    I would add PG, PM, JNJ, WMT and K to your portfolio. Those stocks have a very low beta ratio.

  • Report this Comment On January 15, 2011, at 10:23 AM, Fliujniligui wrote:

    IVR

    RWEOY

    BSBR

    YLWPF

    NBG

    BSBR

    In 10 years you may sit on 30% dividend yield and 300% capital gains.

  • Report this Comment On January 15, 2011, at 11:01 AM, FutureMonkey wrote:

    Nice group. Especially like WM as your overweighted position.

    Are you planning on reinvesting the dividends or accumulating cash?

    I'm 25 years out from retirement, so to me the power of a dividend portfolio is in the dollar-cost averaging accumulation of shares through dividend reinvestment. Makes achieving the mythical day of surpassion much more likely.

  • Report this Comment On January 15, 2011, at 10:38 PM, Superdrol wrote:

    $10,000? That's it ? That's not going to go very far buying all those combined with commission.

  • Report this Comment On January 15, 2011, at 10:57 PM, RiverRover wrote:

    Superdrol--

    commission on Sharebuilder is only $4.00 per stock purchased, no matter how much is invested.. His total commission will be $20.

    Not bad.

  • Report this Comment On January 15, 2011, at 10:58 PM, RiverRover wrote:

    Forgot to add that that has to happen on a Tuesday. Real time trades are $9.95.

  • Report this Comment On January 16, 2011, at 8:12 AM, FORCEFIELDS wrote:

    Anyone know how a projected 7.4 annual yield in 5 years is calculated?

  • Report this Comment On January 16, 2011, at 9:35 AM, rockbox64 wrote:

    JNJ - Stock is down, always increases dividend, solid moat. In my opinion, it must be in. Also has international exposure.

    PM - Hey, 100 billion non american smokers can't be wrong can they?

    WM

    NLY - 15% yield. IMO opinion, you gotta ride her til she bucks ya.

    INTC - Yield, which will only get better, in the tech space. Could buy MSFT, too.

  • Report this Comment On January 16, 2011, at 10:49 AM, Merton123 wrote:

    Superdrol - The way to get around commissions is to buy through a dividend reinvestment program (drip) directly with the company. I don't know if the four companies talked about have a drip program? Share Builder uses the Drip program and charges the $4 commission and you can have all your stocks in one account.

  • Report this Comment On January 16, 2011, at 11:14 AM, summitclark wrote:

    I am a big fan of WM, any thoughts on the large short interest in the stock?

    thanks,

    andrew

  • Report this Comment On January 16, 2011, at 2:06 PM, nickolassc wrote:

    My current dividend portfolio:

    PM, KMB, RTN, WIN, MCD, WWE, SDY

    the pullbacks in WIN and MCD last week were the buying opportunities I was waiting for. I had NGG, but sold and am looking at other utilities to replace it such as EDE.

    Good luck!

  • Report this Comment On January 16, 2011, at 5:53 PM, imyoung wrote:

    @rockbox64,

    You stated "100 billion non american smokers can't be wrong can they?"

    At this point the earth cannot sustain such a number of human beings. Total world population estimates by U.S. Census Bureau: 6,893,955,276 or ~6.9 billion! http://www.census.gov/ipc/www/popclockworld.html.

  • Report this Comment On January 16, 2011, at 9:10 PM, bhughes1001 wrote:

    Great article and discussion. I own and am excited about NUE, HAS, and WM. I also own ABT, WSO, and PEP. I like to add to these intermittently, but also will likely start a YUM position soon. I think it is a great strategy to look at companies with consistent records of increasing dividends in the 8 to 20 year range and look for companies that have the likelihood of growing both earnings and dividends. I think that is a potent combination.

  • Report this Comment On January 17, 2011, at 8:36 AM, mikecart1 wrote:

    Those dividends are pretty bad. You should call this strategy Super Conservative investing. You left out MO. Also X is best-of-breed IMO. I bought in at $18 and expect it to go to at least $100/share before I even think about selling. YUM isn't the best either. MCD is. This portfolio wasn't researched very well.

  • Report this Comment On January 17, 2011, at 12:26 PM, johndunk wrote:

    I do like the promise to not sell for 365 days but I think far more interesting for this (and advice like it) would be "I won't sell within 365 days unless the trigger listed below hits for each stock." Yes, you can't cover all of the possible triggers, but if you see a risk and can communicate it to your readers it would help share your thinking. It also would help combat any accusations of being polyanna on a particular stock.

    I know it's simpler to say 365-days but we're not in a simple world, and I'm not asking for 3 pages of risk assessment on each stock just one risk/trigger piece on each.

  • Report this Comment On January 17, 2011, at 1:27 PM, TMFMoby wrote:

    biolasteve said “I was surprised to see NUE 222% payout ratio? Isn't that a harbinger of things to come vis a vis dividend growth vs. cuts?”

    The steel industry is having a rough time, and that’s why Nucor is the riskiest pick in the bunch. AK Steel (AKS) has a payout ratio of 239% for some perspective.

    There is an uncertain amount of risk in a cut, but my bet is that Nucor’s management, processes, and technology are superior to their competitors and they’ll prevail in the long-run. I also believe in the US steel industry in the long-term. In the short-term, it’s frankly uncertain. That fits my strategy and timeframe but it may not fit yours.

    The short answer is that there's some risk in the short-term, but we don't know how much really. If you don't mind that uncertainty for a potentially higher long-term payout, as I do, keep Nucor in the portfolio.

    Best,

    Jeremy

  • Report this Comment On January 17, 2011, at 1:30 PM, TMFMoby wrote:

    vriguy said: “There are no speculative stocks in VIG, so this is really for the more conservative sort of investor.”

    I agree. If VIG keeps its practices the same, I expect to be holding it 50 years from now. It’s the “set it and forget it” part of the portfolio.

    Foolishly,

    Jeremy

  • Report this Comment On January 17, 2011, at 1:37 PM, TMFMoby wrote:

    shoemaker17 said” How bout this instead: PM, EXC, BP, BRK.B, SDY”

    I like PM, but I generally stay away from utilities like EXC. I’m a bit unconventional in that I like a growth story built into the companies behind the dividends.

    SDY is decent but it has a 50% higher expense ratio than VIG (.35 vs .23) and it’s not focused on companies growing their dividends aggressively, which is the way I lean. You may choose to focus on a higher current yield, but that’s not my personal preference.

    BRK doesn’t pay a dividend.

    Hope that adds to your thinking,

    Jeremy

  • Report this Comment On January 17, 2011, at 1:46 PM, TMFMoby wrote:

    newageinvestor – “I bought Hasbro a few months ago, and since then it's done nothing but go down, unlike the other SA pics I bought. Can anybody comment on why? “

    My advice is to focus on years, not months. Hasbro has everything going for it now that they did a few months ago. Short-term fluctuations shouldn’t bother you. Notice that I’m holding every stock in the portfolio for over 365 days. It’s a bit unadvisable to make a promise like that as crazy, unexpected events could occur in these companies in the next 12 months, but I want to illustrate that I think the risk of that happening is so low that I’ll take the personal hit in my pocketbook if I’m wrong.

    If you’re worried about Hasbro’s long-term outlook, that’s another story, and perhaps you should consider selling. However, please don’t focus on price change, but on where the company is going in the long-term. That’s the way Tom and David Gardner have guided Stock Advisor members for years, and I’m a believer – otherwise my money wouldn’t be in stocks like Hasbro and Nucor.

    Fool on!

    Jeremy

  • Report this Comment On January 17, 2011, at 2:05 PM, TMFMoby wrote:

    biddy11 said "Hey how about taking YUM out and adding MO instead. "

    I like MO and as I stated earlier, PM. But I like the growth story at YUM much more. Just my personal preference.

    Fellow fool and my good friend Anand Chokkavelu bought PM for the Fool's account in August:

    http://www.fool.com/investing/dividends-income/2010/08/31/to...

    Jeremy

  • Report this Comment On January 17, 2011, at 2:12 PM, TMFMoby wrote:

    FutureMonkey said “Are you planning on reinvesting the dividends or accumulating cash? I'm 25 years out from retirement, so to me the power of a dividend portfolio is in the dollar-cost averaging accumulation of shares through dividend reinvestment”

    I 100% agree and will be reinvesting all dividends. Dividend reinvestment alongside rapidly-growing dividends makes a powerful combination. In fact, it's 2/3 of my personal formula for wealth. Check out my article from December for more on the matter:

    http://www.fool.com/investing/general/2010/12/02/introducing...

    Thanks for the great comment,

    Jeremy

  • Report this Comment On January 17, 2011, at 2:33 PM, TMFMoby wrote:

    Superdrol “$10,000? That's it ? That's not going to go very far buying all those combined with commission.”

    The majority of Fool.com readers are investing their income – and not lump sums. $10,000 could be a day’s pay or several months of accumulation. I’m writing for an audience that’s across the spectrum, so I wanted a number that was easily multipliable to each individual’s specific situation. Thus I picked $10,000.

    I use Schwab ($8.95 per trade), so I’m going to pay roughly 0.44% of my $10,000 in commission. I’m planning on holding these companies for a very long time – ie no planned sell costs. In other words, I’m not worried about the commissions. My costs are cheaper than any mutual fund I’ve researched, and I know exactly which companies my money is going into. Please don’t worry about my costs, but if you like the picks, feel free to apply it to your own situation. :)

    However, I agree with your core point: once you start getting to over 1% in commissions (around $4400 for this portfolio) I believe investors should begin thinking about fewer stocks (less trades) or accumulating cash for a longer time period.

    Jeremy

  • Report this Comment On January 17, 2011, at 2:48 PM, DavidOfDukeLow wrote:

    I agree.Keep YUM.Always better News.

    Food is good too!

  • Report this Comment On January 17, 2011, at 2:51 PM, TMFMoby wrote:

    mikecart1 said “Those dividends are pretty bad. You should call this strategy Super Conservative investing. You left out MO. Also X is best-of-breed IMO. I bought in at $18 and expect it to go to at least $100/share before I even think about selling. YUM isn't the best either. MCD is. This portfolio wasn't researched very well.”

    Super Conservative investing doesn’t make for a great headline. Sorry.

    Non-sarcastically, this a basket of companies with rapid dividend growth and superior businesses to back them up. My yield is 50% higher than the market and has grown over the past 5 years while the market has shrunk its yield. I disagree that it’s a conservative portfolio.

    X has a 0.4% yield and has shrunk its dividend by a compounded 15% a year over the last 10 years. It doesn’t belong in this portfolio.

    I assure you I’ve researched this portfolio very well, otherwise I wouldn’t be putting $10,000 into it. I spent about 12 months flip-flopping over which flatscreen TV to buy – you’d better believe I’m serious about my money.

    Thanks for your take on the portfolio. Differing opinions are what makes Fool.com great and they’ll always be welcome here.

    Jeremy

  • Report this Comment On January 17, 2011, at 3:05 PM, TMFMoby wrote:

    johndunk said “I do like the promise to not sell for 365 days but I think far more interesting for this (and advice like it) would be "I won't sell within 365 days unless the trigger listed below hits for each stock."”

    This is a great idea but it is not really suited to a short-form free article on Fool.com, as we have only 2-3 minutes to engage the average reader. I was pushing my editors’ limits (which I love doing) with this article’s length as is. My 365+ day promise is show my own confidence more than to recommend your holding period. I could end up holding through a disaster, but a promise is a promise. It's my risk and not yours.

    I will write update articles throughout the year as events happen but there’ s a better way to get this kind of analysis on these stocks...

    3 of the 4 stocks are being recommended by our premium services, and each of those recommendations have risk/when to sell sections. I use all of our premium services on a daily basis, and I’d suggest you check them out as well. If you or anyone else is interested, shoot me an email (jphillips@fool.com) and I’ll get you set up with a free trial for any of the services. You can also access them by clicking the names of the services in the italic text right below the article.

    Foolishly,

    Jeremy

  • Report this Comment On January 17, 2011, at 4:09 PM, apeyron wrote:

    What is the reason for buying the VIG ETF instead of the Vanguard Dividend Appreciation Index Fund?

  • Report this Comment On January 17, 2011, at 4:31 PM, SG10 wrote:

    With the market as high as it is today and with some uncertainty coming from Europe and China, would you suggest waiting till the next significant pullback?

  • Report this Comment On January 17, 2011, at 4:45 PM, TMFMoby wrote:

    apeyron said: "What is the reason for buying the VIG ETF instead of the Vanguard Dividend Appreciation Index Fund?"

    1) There's a $3000 minimum to buy the fund (VDAIX) and no minimum for the ETF (VIG).

    2) My broker (Schwab) has a $49 transaction fee on the mutual fund vs. a regular equity commission for VIG. If you use Vanguard, that fee may not be there. I'm unsure. I know that TD Ameritrade allows you to buy VIG with no commission, which is awesome.

    3) The expense ratio on VIG is 0.23% vs. 0.35% for VDAIX.

    Basically I picked the option that would make sense for most Fools as Schwab and TDA are in the top 3 brokers for Fool.com readers. Your situation may be different than mine though.

    Great, Foolish question!

    Jeremy

  • Report this Comment On January 17, 2011, at 4:56 PM, TMFMoby wrote:

    SG10 said: "With the market as high as it is today and with some uncertainty coming from Europe and China, would you suggest waiting till the next significant pullback?"

    I'm not a macro analyst so I couldn't really make a call on this, nor am I going to bet on a pullback with my own money. The Fool has lots of differing opinions but one thing David and Tom Gardner agree on (as well as myself) is that you should focus on buying great, undervalued companies rather than trying to predict larger macroeconomic trends.

    This portfolio may go down in the next year or two due to the exact reasons you cite, but where are we supposed to get reliable predictions on that? In reality, there are none. Everyone is just guessing. Some will be right and some will be wrong.

    Instead of worrying about it, I put basically 100% of the cash I don't need in the decade into great companies that I'm confident will thrive regardless of what's thrown at them. If you need the cash in the next year, I wouldn't suggest investing in any of these companies, as I cannot tell you what they're going to do in such a short time period.

    Check out my October article on the concept of time arbitrage for more info:

    http://www.fool.com/investing/international/2010/10/21/2-wor...

    Here's to a Foolishly great year,

    Jeremy

  • Report this Comment On January 17, 2011, at 11:07 PM, PEStudent wrote:

    I like AT%T (5.7% div) and AVT (3.7% div). Long term growth in revenues, earnings, cash flow, and dividend.

  • Report this Comment On January 18, 2011, at 9:06 AM, mikecart1 wrote:

    "

    mikecart1 said “Those dividends are pretty bad. You should call this strategy Super Conservative investing. You left out MO. Also X is best-of-breed IMO. I bought in at $18 and expect it to go to at least $100/share before I even think about selling. YUM isn't the best either. MCD is. This portfolio wasn't researched very well.”

    Super Conservative investing doesn’t make for a great headline. Sorry.

    Non-sarcastically, this a basket of companies with rapid dividend growth and superior businesses to back them up. My yield is 50% higher than the market and has grown over the past 5 years while the market has shrunk its yield. I disagree that it’s a conservative portfolio.

    X has a 0.4% yield and has shrunk its dividend by a compounded 15% a year over the last 10 years. It doesn’t belong in this portfolio.

    I assure you I’ve researched this portfolio very well, otherwise I wouldn’t be putting $10,000 into it. I spent about 12 months flip-flopping over which flatscreen TV to buy – you’d better believe I’m serious about my money.

    Thanks for your take on the portfolio. Differing opinions are what makes Fool.com great and they’ll always be welcome here.

    Jeremy"

    At least you respond to users on here. Respect on that. As far as X, I was in it for dividends but it has risen enough for me to keep it despite its dividend cut. I never understood why Cramer and others on CNBC always shouted Nucor. It had me believe they had something going on the side with the company. I believe I've seen the Nucor CEO at least 2x on Mad Money haha.

  • Report this Comment On January 18, 2011, at 10:52 AM, ashunigam wrote:

    Have look at TWO and MOV also.

  • Report this Comment On January 18, 2011, at 2:34 PM, NACOCapital wrote:

    Seven WHOLE percent? WOW! Hold onto your hats gentlemen. AMAZING!

  • Report this Comment On January 18, 2011, at 4:35 PM, mikecart1 wrote:

    "Seven WHOLE percent? WOW! Hold onto your hats gentlemen. AMAZING!"

    In a country whose overall annual savings rate was in the negatives and still is despite what 'reports' come out - similar to the joke of unemployment data that comes out weekly, the author will have a yield infinitely higher than the typical American citizen. Sorry that the author doesn't impress you.

    -mikecart1, Motley Fool All-Star

  • Report this Comment On January 19, 2011, at 12:42 AM, greenb95 wrote:

    Add Small Cap Value WSTG to your dividend portfolio (currently yields 5.5%)

    Formerly Programmer's Paradise, a 2004 Tiny Gem has been consistently paying dividends since 2003. The future is bright, listen yourself at: http://www.waysidetechnology.com/content.aspx?name=content_w...

  • Report this Comment On January 20, 2011, at 2:43 AM, DavidOfDukeLow wrote:

    With YUM also owns A&W All American Food Restaurants (A&W)

    Including the Root Beer Soda Pop AW.

    I tend to think the Soda Pop AW Root Beer is a hidden Jewel inside of the YUM's portifolio.

    This just in !!!!!

    "That’s right, Yum Brands, which owns the KFC, Pizza Hut, Taco Bell trifecta, is looking to sell off its Long John Silver’s and A&W All-American Food Restaurants in an effort to focus on international expansion."

    There Goes the Root Beer float AW Soda Pop Buisness.

  • Report this Comment On January 21, 2011, at 11:45 AM, Natador54 wrote:

    10K of your personal money into this portfolio? THAT's NOTHING! Call me when you put ALL of your mother's money into it.

  • Report this Comment On January 21, 2011, at 12:03 PM, Bunnyman7 wrote:

    Jeremy,

    Which flat screen TV did you eventually buy?

  • Report this Comment On January 21, 2011, at 12:56 PM, TMFMoby wrote:

    Bunnyman7 - This Samsung:

    http://www.amazon.com/Samsung-LN55C650-55-Inch-1080p-Black/d...

    I'm loving it!

    Jeremy

  • Report this Comment On January 21, 2011, at 1:10 PM, Borbality wrote:

    Damn, dude. I just got a 42 inch Philips for $600 black friday price free shipping too!!

    LONG WMT!!

  • Report this Comment On January 21, 2011, at 1:10 PM, TEDevil wrote:

    Why choose HAS over MAT? Why VIG not BDT?

  • Report this Comment On January 21, 2011, at 1:21 PM, Bunnyman7 wrote:

    Thanks,

    I am selling a mutual fund that has performed badly over the last decade,..............prmgx. I have been considering NUE , WM and YUM for some time and will probably use the proceeds to purchase one of them. (small dollars)

    Good article and information.

    Was LED a consideration before your purchase?

    Eric

  • Report this Comment On January 21, 2011, at 1:41 PM, Icutchacokov wrote:

    Sure, this dude is pumping these stocks because he owns them or is about to own them. The more he pumps the higher his portfolio goes, until these start sucking wind, and they will believe me.These are very low dividends and you cannot count on the dividends being raised especially in these times. Do yourself a favor, you'd be better off shorting these very soon.

  • Report this Comment On January 21, 2011, at 5:20 PM, Winnerfrommidlan wrote:

    I think you should have chosen Healthcare Services Group (HCSG) for this portfolio. They have raised their dividend every quarter for the last 5 years and currently pay a dividend of 4.1 %.

  • Report this Comment On January 21, 2011, at 5:33 PM, topgun12 wrote:

    Sitting petty with:

    ED, BMO, AGNC, keep an eye on this REIT

  • Report this Comment On January 21, 2011, at 5:36 PM, hiuno wrote:

    My $10,000 income portfolio accumulated over the past six months averages over 11% return, and it has increased in value about 10% over that time. The broker I use charges me $2.95 per trade so that's not really an issue.

    Is it as solid for the long term as the stocks in the MF portfolio?

    No. But using Vector Vest ratings, it rates only slightly below the MF list.

    I'll just keep an eye on it and if any danger looms I'll make a change.

  • Report this Comment On January 21, 2011, at 5:51 PM, OlNewbie wrote:

    My opinion -

    Interesting article.

    $10K is not much skin in the game.

    WM is good.

    VIG is good.

    YUM is good.

    The others are iffy investments and there may be better alternatives as others have suggested.

    I would suggest consideration of my dividend stuff, of course, which is -

    MO, JNJ, PG, MCD, EPD, KO, CTL, T, VOD, PGX

    $20K each and I've had most for yeaars.

    Looking for dividend growth. If dividend is cut, I sell.

    Reinvesting dividends & capital gains = compounding - The ninth wonder of the world.

    If price goes down - dividend yield goes up, making the stock more attractive which attracts other buyers which can result in the price going up.

    I guess it's pretty much buy & hold until something breaks in one of these, which doesn't happen all that often.

    Plus they have records of increasing their dividends.

    My 2 cents.

  • Report this Comment On January 21, 2011, at 6:06 PM, OlNewbie wrote:

    Oh! What a surprise. I just clicked on the link to see the 13 High Yielding Stocks... After the collection of personal investing information, the offer to sign up for more stuff... then the sales pitchat the end!!

    Too bad this is so typical in Fool land.

    Good comments by Fool members however.

    And the titles to Fool articles are very alluring.

  • Report this Comment On January 21, 2011, at 9:43 PM, BucknFl wrote:

    CPL check it out Brazil utility paying 7% with growth.

  • Report this Comment On January 22, 2011, at 10:37 AM, FoolSolo wrote:

    I'm not much of a Dividend investor, although I have been thinking about some diversification lately, so I read this article.

    I like the concept, but the article and the comments sent me to my favorite screening site, FINVIZ.COM.

    It seems to me if you're going to invest in individual stocks to get a nice dividend, you might as well buy companies that have solid fundamentals, are making profit, and are growing their sales and earnings, so I built a screen with the following parameters:

    Market Cap: > $2 Billion

    Yield: > 3%

    Payout Ratio: > 30%

    Debt/Equity: < 30%

    P/FCF: < 50

    EPS Growth past 5 years: > 0%

    Sales Growth past 5 years: > 0%

    Net Profit Margin: > 10%

    The screen found 7 companies. Here they are in Descending order based on yield:

    CTCM: 5.47%

    TEO: 5.11%

    GRMN: 4.87%

    CHT: 4.26%

    MCHP: 3.78%

    CHL: 3.71%

    JNJ: 3.45%

    You'll find that all these companies have ROE > 15%, except CTCM which is at 13.11%, and a good number have strong earnings projections looking forward.

    Of course, you can play with the numbers all you like on Finviz and come up with your own list. For example, if you raise the debt/equity rate to 40% it brings MRK onto list with a yield of 4.48%. Increase it to 50% and you get MTL 3.53% and NVS 3.45%. Drop the profit margin to 5% and you also get SLF with a yield of 4.54%.

  • Report this Comment On January 22, 2011, at 11:45 AM, guyintlh wrote:

    Help please. I have 5000 shares of BAC that I inherited when it had a 6.9 dividend. Basis of $60. Should I cut my losses and move on to some of your suggestions? I am sick everytime I look at the portfolio. Am 65. Thanks.

  • Report this Comment On January 22, 2011, at 5:29 PM, GOFORAWILDRIDE wrote:

    guyintlh

    Ever hear of I-HUB? which is short for INVESTORS HUB?

    I am a moderator of two boards which list dividend stocks.

    The boards are called MONTHLY DIVIDEND STOCKS the second one is called QUARTERLY DIVIDEND STOCKS

    You can find many gems I have investigated free for all.

    You can join as a free-member, I will leave it up to you if you find it useful to be a paying member.

    You may want to look into RSO it pays currrently at a 14.4% rate $0.25 * 4= $1.00

    $1.00/ $6.94 = 14.4%

    I also recommend CLM it is a MONTHLY DIVIDEND STOCK which pays currently .1278 per share each month.

    $0.1278*12=$1.5336

    $1.5336/ 9.01 = 17.02% which when you take the compounding into consideration gives a 19.99% yearly if you reinvest back into the stock to gain additional shares over time.

    The I-HUB site also lists other stocks as well

    NOTE: CLM has been paying monthly dividends for 20 years now.

  • Report this Comment On January 22, 2011, at 6:02 PM, skolketch wrote:

    Just joined up with you guys....enjoyed the comments/recommendations/rationales offered....will stay tuned

  • Report this Comment On January 22, 2011, at 8:14 PM, birder1500 wrote:

    Thanks but I will stick with KO.

  • Report this Comment On January 23, 2011, at 1:47 PM, hhmediate wrote:

    The more reading I do the more confused I get. In 2 yrs I will need to live on SS, dividends & part-time work. My current dividend payers are; t,hd,msft,cim,mchp,pom,wri,win,fly,ssw,tck,bpl. I will soon be dumping dell & ebay & along with cash have about $40K to invest in dividend payers. Need long term suggestions. Thanks.

  • Report this Comment On January 23, 2011, at 2:51 PM, Supersyd wrote:

    Great list, Jeremy, especially the first, WM. Speaking of luscious dividends, have you heard of the Canadian natural gas distributor, Valener (VNR - TSX)? Pays 5.8%!! I don't own it yet, but am thinking of jumping in. What think?

  • Report this Comment On January 23, 2011, at 4:53 PM, tfilter6 wrote:

    I am a little miffed at your comment about investing $10,000 of your own money in your recomendations, I would think that $10,000 to you would be like about 10 bucks to the average person. And to anyone expecting to acheive a decent dividend return, $100,000 would be an absolute minimum to be considered an actual investment. $10,000 is treating us like we are the "fools". The annual "income" from a $10,000 investment wouldn't even begin to support the cost of owning one dog for 4 months.

  • Report this Comment On January 23, 2011, at 7:09 PM, ianbh wrote:

    A buddy has been investing in ATAX which is paying 9% (federal tax free) dividends. Hasn't missed a dividend since it was started in 1982. Seems too good to be true, any thoughts? Ian, Iowa

  • Report this Comment On January 24, 2011, at 12:09 AM, Latinus wrote:

    I find it amusing that, after you explained your $10K figure, quite a few Fools kept picking on it.

    -

    I praise you for answering so many of the comments.

  • Report this Comment On January 26, 2011, at 3:24 PM, radicalaccountin wrote:

    Anyone commenting on $10K has never written an article for publication. You've got to use round numbers, and $100K is ridiculous.

    I praise you for publishing an article about what you are doing with your own money, up front, so it doesn't feel as if you're trying to pump the stock, also being humble enough that maybe you will look foolish.

    This is one of the best articles I've read on MF.

  • Report this Comment On January 28, 2011, at 3:20 PM, Sileus wrote:

    Thanks for the great article Jeremy. One of the interesting things about investing is the variety of opinions, even in the same basic style/method.

    Sileus

    Long: WM VIG

  • Report this Comment On February 16, 2011, at 2:19 PM, AceOfSaves wrote:

    I'm late in reading this article but still wanted to comment because I really enjoyed it. I also enjoyed the comments by the users and your well-written and informative replies.

    After reading the comments on the $10K amount invested, I feel pretty insignificant. I'm only a small fish investor (10K actually is a lot to me) so I really appreciate that you also keep us little guys in mind when writing these articles. Just because I invest much less, it doesn't mean I can't apply the same strategy. Thank you very much Jeremy.

    Great article! Great comments and replies!

    By the way, this is my first ever comment on Fool.com.

    Cheers!

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