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This High-Yield Portfolio Will Beat the Market

Forty-five 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:


Average Cost


Recent Price

Total Value


Altria (NYSE: MO  ) $24.86 40 $29.72 $1,188.80 19.55%
Philip Morris (NYSE: PM  ) $61.83 17 $78.51 $1,334.67 26.00%
National Grid (NYSE: NGG  ) $45.63 22 $47.99 $1,055.78 5.17%
Annaly Capital Management (NYSE: NLY  ) $17.55 57 $16.11 $918.27 (8.21%)
Frontier Communications (NYSE: FTR  ) $8.71 149 $4.81 $716.69 (44.78%)
Southern (NYSE: SO  ) $37.87 26 $46.35 $1,205.10 22.39%
France Telecom (NYSE: FTE  ) $22.23 45 $15.31 $688.95 (31.13%)
Vodafone Group $28.69 38 $27.41 $1,041.58 (4.46%)
Eli Lilly $34.48 29 $41.30 $1,197.70 19.78%
Bristol-Myers Squibb $25.37 39 $35.06 $1,367.34 38.19%
Cash       $46.51 0%
Dividends Receivable       $81.55 0%
Total Portfolio       $10,842.94 8.43%
Investment In SPY         (3.32%)
Return vs. SPY (percentage points)         +11.75

Source: S&P Capital IQ, as of Dec. 28.

Since my last report, the SPDR S&P 500 fell 0.35%. Our portfolio fell more than the market, with our outperformance moving from beating the market by 12.18 percentage points to an 11.75-point advantage. 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 10 months.

Movers and shakers
As usual of late, our largest mover the past week was Frontier Communications, which fell 5.7%.

There are still six upcoming dividends for the portfolio:

  • Frontier will pay a dividend of $0.1875 per share on Dec. 30. The ex-dividend date was Dec 7.
  • National Grid will pay a dividend of $1.09 per share on Jan. 18. The ex-dividend date was Nov. 30.
  • Altria will pay a dividend of $0.41 per share on Jan. 10. The ex-dividend date was Dec. 22.
  • Philip Morris International will pay a dividend of $0.77 per share on Jan. 10. The ex-dividend date was Dec. 20.
  • Vodafone will pay a dividend of 0.705 pence (roughly $1.12; not included in Dividends Receivable as exchange rate won't be determined until Jan. 20) per share on Feb. 3. The ex-dividend date was Nov. 16.
  • Eli Lilly will pay a dividend of $0.49 per share on March 9. The ex-dividend date is Feb. 13.

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 companies above along with the 11 names from a brand-new free report from Motley Fool's expert analysts called "11 Rock-Solid Dividend Stocks." To get instant access to the names of these 11 dividend stocks, 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, France Telecom, Vodafone, Eli Lilly, and Bristol-Myers Squibb.

The Motley Fool owns shares of Altria Group, 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 (1) | Recommend This Article (10)

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 December 29, 2011, at 4:13 PM, tucsonics wrote:

    You would have done much better with the cream of the XLU: SO D DUK AEP FE ED. Gain was around 24% with dividends plus stock appreciation. I got sucked into NLY and it will take me a year of dividends to break even.

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