The World's Best Dividend Portfolio

In June, I invested my money equally in a selection of 10 high-yield dividend stocks. 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

Recent Price

Total Value

Return

Southern (NYSE: SO  ) $39.71 25.0818 $44.00 $1,103.60 10.8%
Exelon (NYSE: EXC  ) $41.82 23.818 $43.02 $1,024.65 2.9%
National Grid (NYSE: NGG  ) $48.90 20.3693 $47.60 $969.58 (2.7%)
Philip Morris International (NYSE: PM  ) $68.49 14.5429 $74.56 $1,084.32 8.9%
Annaly Capital (NYSE: NLY  ) $18.24 55 $16.18 $889.90 (11.3%)
Frontier Communications (NYSE: FTR  ) $7.88 126.4243 $5.17 $653.61 (34.4%)
Plum Creek Timber $38.42 26 $35.29 $917.54 (8.1%)
Brookfield Infrastructure Partners (NYSE: BIP  ) $26.12 38.2825 $25.94 $993.05 (0.7%)
Vodafone $26.52 37.5566 $26.93 $1,011.40 1.5%
Seaspan $14.61 69 $10.54 $727.26 (27.9%)
Cash       $222.79  
Dividends Receivable       $65.80  
Total Portfolio       $9,663.50 (3.2%)
Investment in SPY (including dividends)         (3.2%)
Relative Performance (percentage points)         0.0

Source: S&P Capital IQ.

Our total portfolio performance moved from -1.9% last week to -3.2% this week, and now we're just even with the S&P, albeit with much less volatility in the interim. But I'm confident in the long-run nature of this portfolio, and I fully expect it to outperform. Even if our capital goes down in the interim, we'll still see dividends while we wait. We continue to have six stocks outperforming the index.

The European situation continues to fester, with Eurocrats failing to do anything much yet to fix their morass. I'm not very optimistic about the situation at all, and if we should see a general market downturn, I'll be glad to be in dividend stocks, which should see lower downside volatility. We should still see good performance from names such as Annaly, which thrives in a low-rate environment.

As I mentioned last week, because of the Fool's trading restrictions, I have yet to add to my Annaly position. And I've decided to up my reinvestment in Annaly to $170. While not all the news has been good from the mortgage REIT sector, Annaly still looks poised to pump out solid dividends.

If you're looking for other dividend ideas, I just wrote another article on a great one called "The Dividend-Paying 2-Bagger." It has a meaty dividend and could be a double besides. You can read all the details, including why I decided to buy it for my own portfolio (not the World's Best Portfolio yet).

Dividends and other announcements
Going into the holiday season the news has been pretty light. We have these bits of dividend news:

Dividend news:

  • Vodafone announced a special dividend of 4 pence on top of its 3.05 pence interim payout. The stock traded ex-div on Nov. 16, and the money will be paid out on Feb. 3. In dollars, the total payout comes to about $1.12 per U.S. share at current exchange rates.
  • Southern went ex-div on Nov. 7 and distributed $0.4725 per share on Dec. 6.
  • Exelon went ex-div on Nov. 15 and paid out $0.525 per share on Dec. 9.
  • Frontier went ex-div on Dec. 7 and pays out $0.1875 per share on Dec. 29.
  • Philip Morris trades ex-div on Dec. 20 and pays out $0.77 a share on Jan. 10.

All that, of course, means more money coming into our pockets shortly.

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 continued 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 be holding these stocks for at least a year and will continue to track the portfolio over the course of the year, including news on these companies.

If you like dividends, consider the 10 tickers above along with the 11 names from a brand new free report from Motley Fool's expert analysts called "Secure Your Future With 11 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 11 high yielders, simply click here -- it's free.

Jim Royal, Ph.D., owns shares of the 10 portfolio stocks mentioned in the table. The Motley Fool owns shares of Seaspan, Brookfield Infrastructure, Annaly, Plum Creek, and Philip Morris. The Fool owns shares of and has created a covered strangle position on Plum Creek. Motley Fool newsletter services have recommended buying shares of Exelon, National Grid, Philip Morris, Vodafone, Southern, and Brookfield Infrastructure, as well as writing a covered straddle position in Seaspan and a covered strangle position in Exelon. 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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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 December 09, 2011, at 1:29 PM, likes2nap wrote:

    Sorry Jim, but your performance in this portfolio over the past 6 months hasn't been too good. You would have fared better if you concentrated your position in Philip Morris alone and sold covered calls and naked puts (in your shares acquisition).

  • Report this Comment On December 09, 2011, at 3:36 PM, Easybeans wrote:

    How do you feel about FTR? Think they'll ever make it back over $7?

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