This High-Yield Dividend Portfolio Will Beat the Market

Twenty weeks ago, I invested my cold hard cash into 10 high-yield dividend stocks I believe will beat the market. Let's see the results so far:

Company

Average Cost

Shares

Recent Price

Total Value

Return

Altria (NYSE: MO  )

$24.86

40

$26.83

$1,073.20

7.92%

Philip Morris (NYSE: PM  )

$61.83

16

$68.07

$1,089.12

10.09%

National Grid (NYSE: NGG  )

$45.63

22

$49.71

$1,093.62

8.94%

Annaly Capital Management (NYSE: NLY  )

$17.55

57

$18.32

$1,044.24

4.39%

Frontier Communications (NYSE: FTR  )

$9.14

125

$8.14

$1,017.06

(11.00%)

Southern Co.

$37.87

26

$40.58

$1,055.08

7.16%

France Telecom

$22.23

45

$20.95

$942.75

(5.76%)

Vodafone Group

$28.88

34

$26.93

$915.62

(6.75%)

Eli Lilly

$34.48

29

$37.35

$1,083.03

8.31%

Bristol-Myers Squibb (NYSE: BMY  )

$25.37

39

$29.11

$1,135.29

14.74%

Cash

 

159.53

 

41.94

0%

Dividends Receivable

 

132.43

 

193.6

0%

Total Portfolio

     

$10,684.55

6.85%

Investment In SPY

       

2.39%

Return vs. SPY

       

+4.46%

Source: Capital IQ, a division of Standard & Poor's. Data as of noon, July 5, 2011.

Over the past month, the S&P rose 2.6%. As the market rose, our portfolio outperformance dropped, moving from outperforming the market by 7 percentage points to beating it by roughly 4.5 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 20 weeks. I firmly believe the results will bear us out.

Movers & shakers
Of our stocks, the biggest mover in the portfolio the past month was Bristol-Myers Squibb, which rose 5.38% (after adjusting for the dividend). The main reason for the rise was a June 23 press release announcing that Pfizer (NYSE: PFE  ) and Bristol-Myers Squibb's atrial fibrillation drug Eliquis met key endpoints in its quest to replace warfarin. If they are ultimately successful, it could mean billions in sales for the pair.

Money!
There are seven upcoming dividends for the portfolio:

  1. France Telecom will pay a dividend of $1.13 on July 7. The ex-dividend date was June 7.
  2. Philip Morris International will pay a dividend of $0.64 on July 11. The ex-dividend date was June 21.
  3. Altria will pay a dividend of $0.38 on July 11. The ex-dividend date was June 13.
  4. Annaly Capital Management will pay a dividend of $0.65 on July 28. The ex-dividend date was June 28.
  5. Bristol-Myers Squibb will pay a dividend of $0.33 on Aug. 1. The ex-dividend date was June 29.
  6. National Grid will pay a dividend of $1.9005 on Aug. 17. The ex-dividend date was June 3.
  7. Vodafone will pay a dividend of GBP 0.605 on Aug. 5. The ex-dividend date was June 1.

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 on when I'm going to reinvest all my dividends, and keep you abreast of news affecting these companies.

Consider the 10 tickers above along with the 13 names from a free report from Motley Fool 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.

Dan Dzombak can be found on his Twitter account: @DanDzombak. He owns shares of Altria, Philip Morris, National Grid, Annaly Capital, Frontier, Southern Co., France Telecom, Vodafone, Eli Lilly, and Bristol-Myers Squibb.

The Motley Fool owns shares of Altria, Chimera, Philip Morris International, and Annaly Capital. Motley Fool newsletter services have recommended buying shares of Southern, France Telecom, Philip Morris, Vodafone, and National Grid. 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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  • Report this Comment On July 05, 2011, at 5:36 PM, benn44 wrote:

    Totally agree. I have purchased DRIPS over the last several years and over the last Decade I have averaged a little over 8.5% return. This includes some purchases; Ford at $5.27 per share and sold at $16.17 a share, as well as Lithium Inc. just before they were bought out, and Corning after they sold their last fiber optic plant. My current portfolio shows B&G, AV, EEI, FL, KWR, NFG, NWBI, PFE, PPL, PSEC, UVV and ZARLF.OB

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