|Altria (NYSE: MO )||$24.86||40||$27.29||$1,091.60||9.77%|
|Philip Morris (NYSE: PM )||$61.83||16||$68.04||$1,088.64||10.04%|
|National Grid (NYSE: NGG )||$45.63||22||$48.94||$1,076.68||7.25%|
|Annaly Capital Management (NYSE: NLY )||$17.55||57||$18.48||$1,053.36||5.30%|
|Frontier Communications (NYSE: FTR )||$9.36||106||$7.92||$839.52||(15.38%)|
|Southern Co. (NYSE: SO )||$37.87||26||$39.58||$1,029.08||4.52%|
|Investment in SPDR S&P 500||(2.16%)|
|Return vs. SPDR S&P 500 (percentage points)||+7.05|
Source: Capital IQ, a division of Standards and Poor's. Data as of June 8, 2011.
Over the past month, the S&P fell 4.31%. Our portfolio expanded its outperformance of the market, moving from outperforming the market by 3.3 percentage points to beating it by more than 7 percentage points. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's only been 16 weeks. I firmly believe the results will bear us out.
Movers and shakers
Of our stocks, the biggest mover in the portfolio over the past month was Frontier Communications, whose price fell 7.15%. I plan on using the stock's recent decline to add shares of Frontier Communications to the portfolio. The purchase will be made tomorrow (June 10), so those following the portfolio have time to take advantage at the same price.
While the price has declined, the company is still on track in integrating and expanding the operations it acquired from Verizon last year. The company still generates massive amounts of free cash flow, allowing it to pay the interest on its debt and a sizable dividend which, with the decline in price, comes to a yield of more than 9%.
There are seven upcoming dividends for the portfolio:
- Eli Lilly will pay a dividend of $0.49 on June 10. The ex-dividend date was May 11.
- France Telecom will pay a dividend of 1.40 euros on June 15. The ex-dividend date is June 10.
- Frontier Communications will pay a dividend of $0.1875 on June 30. The ex-dividend date was June 7.
- Philip Morris International will pay a dividend of $0.64 on July 11. The ex-dividend date is June 21.
- Altria will pay a dividend of $0.38 on July 11. The ex-dividend date is June 13.
- National Grid will pay a dividend of $1.9005 on Aug. 17. The ex-dividend date was June 3.
- Vodafone will pay a dividend of GBP 0.605 on Aug. 5. The ex-dividend date was June 1.
Our decision to purchase Annaly Capital rather than its offshoot Chimera (NYSE: CIM ) , which Annaly manages, is paying off as fear has been re-entering the market. Chimera invests in risky mortgages while Annaly only invests in agency-backed mortgages. The market has reacted accordingly the past month, as Annaly has risen 2.3% while Chimera has fallen 12%. Some Fools have joined us in seeing the benefits of investing in Annaly, while others have taken stakes in both.
My Foolish bottom line
I'm highly confident in this portfolio's ability to crush the market over the next decade, and that's why I put $10,000 of my personal cash into these stocks. My strategy is simple. I'm buying strong companies with outsized dividends, reinvesting those dividends, and holding them for the long run. Over the coming year, I'll track my performance, update you when I'm going to reinvest all my dividends, and keep you abreast of news affecting these companies.
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