This High-Yield Dividend Portfolio Will Beat the Market

Six months 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

$26.78

$1,071.20

7.72%

Philip Morris (NYSE: PM  )

$61.83

16

$70.50

$1,128.00

14.02%

National Grid (NYSE: NGG  )

$45.63

22

$50.80

$1,117.60

11.33%

Annaly Capital Management (NYSE: NLY  )

$17.55

57

$17.71

$1,009.47

0.91%

Frontier Communications (NYSE: FTR  )

$8.95

137

$7.40

$1,013.80

(17.32%)

Southern Co.

$37.87

26

$41.10

$1,068.60

8.53%

France Telecom (NYSE: FTE  )

$22.23

45

$19.10

$859.50

(14.08%)

Vodafone Group (NYSE: VOD  )

$28.69

38

$26.78

$1,017.64

(6.66%)

Eli Lilly

$34.48

29

$36.99

$1,072.71

7.28%

Bristol-Myers Squibb

$25.37

39

$29.29

$1,142.31

15.45%

Cash

 

7.5

 

7.5

0%

Dividends Receivable

 

68.31

 

68.31

0%

Total Portfolio

     

$10,576.64

5.77%

Investment In SPY

       

(7.08%)

Return vs SPY

       

12.85%

Source: Capital IQ, a division of Standard & Poor's, as of Aug. 29, 2011.

Over the past week, the S&P 500 rose 7.7%. As the market rose, our portfolio outperformance fell, moving from beating the market by 16.51% to beating the market by 12.85%. 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 six months. I firmly believe the results will bear us out.

Movers and shakers
Of our stocks, the biggest mover in the portfolio the past week was Frontier Communications, which rose 5.71%.

Money!
There are four upcoming dividends for the portfolio:

  1. Southern Co. will pay a dividend of $0.4725 on Sept. 6. The ex-dividend date was July 28.
  2. France Telecom will pay a dividend of $0.85 on Sept. 8. The ex-dividend date is Sept. 5.
  3. Eli Lilly will pay a dividend of $0.49 on Sept. 9. The ex-dividend date was Aug. 11.
  4. Frontier Communications will pay a dividend of $0.1875 on Sept. 30. The ex-dividend date is Sept. 7.

Dividend ideas
Last week I wrote an article examining the top performing dividend stocks since the turn of the millennium and gave a stock idea I think could be on the list at the end of the decade. Click here to read more.

Also last week, Jim Royal reiterated his call of McDonald's as the dividend play of a lifetime. Click here to read more.

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'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.

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 Group, Chimera Investment, Philip Morris International, and Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Southern, France Telecom, Philip Morris International, Vodafone Group, 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.


Read/Post Comments (4) | Recommend This Article (9)

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 August 30, 2011, at 1:24 PM, OutperformOrDie wrote:

    Good work, Dan!

  • Report this Comment On August 30, 2011, at 6:11 PM, xetn wrote:

    MO raised its div by 7.9% to $.41.

  • Report this Comment On August 31, 2011, at 12:12 AM, mm5525 wrote:

    PM will raise when they declare on 9/14 by @ 6 cents just like they did last September.

  • Report this Comment On August 31, 2011, at 10:31 PM, GW1000 wrote:

    Not a bad portfolio (I own five of these), but it is not as diversified as it should be in my opinion. There are two tobacco companies, three telecom companies, two healthcare companies, two utilities, and a REIT. There are no financial, industrial, retail,or tech companies. Here is a better portfolio:

    Abbott Labs

    Johnson & Johnson

    Phillip Morris International

    Southern Company

    National Grid

    Wal-Mart

    Unilever

    Intel

    Southern Copper

    Nucor

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