The World's Best Dividend Portfolio

In June 2011 I invested my money equally in a selection of 10 high-yield dividend stocks. With a year of success behind me, in July 2012, I added even more money to the portfolio. 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.


Cost Basis



Total Value


Southern $39.71 25.0818 4.3% $1,143.23 14.8%
Exelon (NYSE: EXC  ) $41.36 23.818 5.7% $1,062.23 (10.9%)
National Grid $48.90 20.3693 5.4% $1,109.11 11.3%
Philip Morris International (NYSE: PM  ) $68.49 14.5429 3.5% $1,289.81 29.5%
Annaly Capital (NYSE: NLY  ) $17.79 72.5 12.9% $1,239.03 (3.9%)
Frontier Communications $7.88 126.4243 8.8% $575.86 (42.2%)
Plum Creek Timber $38.42 26 4.2% $1,048.84 5%
Brookfield Infrastructure Partners $26.12 38.2825 4.1% $1,390.80 39.1%
Vodafone $26.52 37.5566 5% $1,095.90 10%
Seaspan $14.90 76 6.2% $1,320.20 7%
AT&T $35.20 28.4 4.8% $1,038.30 3.9%
Retail Opportunity Investments $12.20 81.95 4.5% $1,030.93 3.1%
Annaly Preferred C $25.92 38.5 7.3% $1,002.93 0.3%
Cash       $17.43  
Dividends Receivable       $49.81  
Original Investment       $12,983.97  
Total Portfolio       $14,414.41 11%
Investment in SPY (including dividends)         10.1%
Relative Performance (percentage points)         0.9

Source: S&P Capital IQ.

Our portfolio was off quite a bit for just a week, moving from 12.7% to 11% this week. Surprisingly, on this down week, we actually lost ground on the S&P, moving from 1.5 percentage points up to just 0.9. We usually gain on the S&P when it goes down. However, I still expect our stocks to outperform our benchmark. Our blended yield is 5.8% and we have quite a few dividends in the next couple of weeks.

I've selected Philip Morris for my portfolio because of its international growth profile, broad geographic diversity, and growing dividend, among other reasons. But some investors have a soft spot for Altria (NYSE: MO  ) , the all-American tobacco company that has done very well in the last six months and still offers a much better dividend (5.2% to 3.4%). Other tobacco investors prefer another play, Lorillard (NYSE: LO  ) , which pays a juicy 5% yield and is focused on the U.S. If you're looking for which is the better American bet, fellow Fool Alex Planes breaks it all down for you here.

Exelon continues to divest power plants as part of its acquisition of Constellation a few months ago. Now the company has sold five fossil and biomass plants in California. Recently the company sold three Maryland coal-powered plants.

Shortly, we'll be receiving our first dividend from the only preferred stock in our portfolio, the Series C from Annaly Capital. It pays out an attractive 7.3% at the current price, and I'm interested in the preferred as the dividend on Annaly common slowly slides.

Dividends and other announcements
We're mostly through earnings season, and have lots of dividend news for the moment.

Dividend news:

  • Seaspan went ex-dividend on Aug. 10 and paid out $0.25 per share on Aug. 22.
  • Southern went ex-dividend on Aug. 2 and pays out $0.49 per share on Sept. 5.
  • Plum Creek went ex-dividend on Aug. 15 and pays out $0.42 per share on Aug. 31.
  • Exelon went ex-dividend on Aug. 13 and pays out $0.525 per share on Sept. 10.
  • ROIC went ex-dividend on Aug. 14 and pays out $0.14 per share on Aug. 31.
  • Annaly Preferred C goes ex-dividend on Aug. 31 and pays $0.47 per share on Oct. 1.

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

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 13 tickers above along with the new names from a brand-new free report from Motley Fool's expert analysts called "Secure Your Future With 9 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 nine high-yielders, simply click here -- it's free.

Jim Royal, Ph.D., owns shares of the 13 portfolio stocks mentioned in the table. The Motley Fool owns shares of Seaspan, Brookfield Infrastructure, ROIC, and Annaly. Motley Fool newsletter services have recommended buying shares of Vodafone, ROIC, National Grid, Brookfield Infrastructure, Exelon, Annaly, and Southern, as well as writing covered straddle positions on Exelon and Seaspan. 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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10/21/2016 4:00 PM
EXC $32.50 Down -0.34 -1.04%
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