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.

Company

Cost Basis

Shares

Yield

Total Value

Return

Southern

$39.71

25.0818

4.6%

$1,060.46

6.5%

Exelon (NYSE: EXC  )

$41.36

28.818

7.3%

$831.40

(30.2%)

National Grid (NYSE: NGG  )

$48.90

20.3693

5.7%

$1,140.68

14.5%

Philip Morris International

$68.49

14.5429

3.8%

$1,290.25

29.5%

Annaly Capital (NYSE: NLY  )

$17.79

72.5

13.6%

$1,062.85

(17.6%)

Frontier Communications

$7.88

126.4243

9%

$558.80

(43.9%)

Plum Creek Timber

$38.42

26

4%

$1,087.32

8.8%

Brookfield Infrastructure Partners (NYSE: BIP  )

$26.12

38.2825

4.4%

$1,300.84

30.1%

Vodafone

$26.52

37.5566

5.9%

$952.44

(4.4%)

Seaspan (NYSE: SSW  )

$15.14

89

6.5%

$1,376.83

2.2%

AT&T

$35.20

28.4

5.2%

$961.34

(3.8%)

Retail Opportunity Investments

$12.20

81.95

4.5%

$1,009.62

1%

Annaly Preferred C

$25.98

38.5

7.6%

$966.35

(3.4%)

Cash

     

$82.59

 

Dividends Receivable

     

$69.30

 

Original Investment

     

$12,983.97

 

Total Portfolio

     

$13,751.06

5.9%

Investment in SPY
(including dividends)

       

7%

Relative Performance
(percentage points)

       

(1.1)

Source: Capital IQ, a division of Standard & Poor's.

Our portfolio was up nicely for the week, moving from 3.8% to 5.9%. But the S&P did better, so we moved from down 0.3 to down 1.1 percentage points. That's disappointing for a portfolio that's led the S&P for much of the past year. But given the uncertainty over how the U.S. tax code will treat dividends next year, it's not too hard to fathom. People want out, out, out -- but dividends have been shown to outperform in the past when taxes were significantly higher, so I'm not concerned on that front. Our portfolio is now yielding 6.1% -- much higher than the S&P while we wait for our gains.

We have $82 in cash in the portfolio now, and we should have another $69 over the next few weeks as dividends come trickling in. We'll look to put that to work soon, with our usual minimum reinvestment of $100. What's the best stock of those listed above, Fools? Let me know in the comments box below.

The recent plummet in mortgage REIT stocks has some analysts speculating that bigger players might swoop in to buy smaller peers. That might be good if the granddaddy of mortgage REITs -- Annaly -- could find an attractive deal. But would it get a better deal than what it could already get from its own stock? That's now trading at 88% of book value for a set of assets that Annaly knows intimately, and the company already has a stock repurchase authorization out there. In addition, we'll soon learn what Annaly's next dividend will be.

Fellow Fool Tony Reading takes a look at the men behind National Grid. The U.K.-based utility rates pretty fairly, he reckons. You can read the article here.

Fellow Fool Taylor Muckerman discusses the questions that are now on all Exelon investors' minds: Will the company trim its dividend, and if so, by how much? The stock tanked on management's declaration that the company might cut back in order to maintain its credit rating.

Fool blogger Matthew DiLallo lays out the bull case for Seaspan – one that I strongly agree with: A value-focused management team, stock buybacks, and the potential for rapidly increased dividends. It's what dividend investors should be salivating over.

Dividends and earnings announcements
Here is the recent news on earnings and dividends:

Dividend news: 

  • Southern went ex-dividend on November 1 and pays out $0.49 per share on December 6.
  • Seaspan went ex-dividend November 9 and paid out $0.25 per share on November 23.
  • Retail Opportunity Investments went ex-dividend November 9 and pays out $0.14 per share on November 30.
  • Exelon went ex-dividend November 13 and pays out $0.525 per share on December 9.
  • Plum Creek went ex-dividend November 14 and pays out $0.42 per share on November 30.
  • Vodafone went ex-dividend on November 20 and pays out $0.519 per share on February 6.
  • Brookfield Infrastructure goes ex-dividend on November 28 and pays out $0.375 per share on December 31.

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 continue to track and report on the portfolio's progress, including news on these companies.

If you like dividends, consider the 13 tickers above along with the 9 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.


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