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

4.5%

$1,091.31

9.6%

Exelon

$41.36

28.818

7%

$863.10

(27.6%)

National Grid

$48.90

20.3693

5.7%

$1,167.16

17.2%

Philip Morris International (NYSE: PM  )

$68.49

14.5429

4%

$1,243.42

24.8%

Annaly Capital (NYSE: NLY  )

$17.79

72.5

13.7%

$1,070.10

(17%)

Frontier Communications (NASDAQ: FTR  )

$7.88

126.4243

8.9%

$560.06

(43.8%)

Plum Creek Timber

$38.42

26

3.8%

$1,165.32

16.7%

Brookfield Infrastructure Partners (NYSE: BIP  )

$26.12

38.2825

4.4%

$1,321.51

32.2%

Vodafone (NASDAQ: VOD  )

$26.52

37.5566

5.9%

$955.82

(4%)

Seaspan

$15.24

95

5.9%

$1,586.50

9.6%

AT&T

$35.20

28.4

5.2%

$970.43

(2.9%)

Retail Opportunity Investments

$12.20

81.95

4.3%

$1,057.16

5.7%

Annaly Preferred C

$25.98

38.5

7.6%

$962.89

(3.7%)

Cash

     

$32.74

 

Dividends Receivable

     

$75.61

 

Original Investment

     

$12,983.97

 

Total Portfolio

     

$14,123.12

8.8%

Investment in SPY (Including Dividends)

       

11.3%

Relative Performance (Percentage Points)

       

(2.5)

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

Our portfolio was up a bit for the week, moving from 8.3% to 8.8%. But the S&P leaped much higher – up 2.3% -- leaving us down 2.5 percentage points. It looks like dividend investors are getting antsy as fiscal cliff negotiations continue to be fruitless. But this is a short-term concern, not a long-term one, and once the current hullaballoo settles and investor uncertainty dissipates, I expect we'll see dividend stocks do well again.

Our portfolio is now yielding 6% -- much higher than the S&P while we wait for our gains. Annaly announced its dividend for the quarter at $0.45 per share. That's down from $0.50 in the sequentially prior quarter, and continues the slow decline in Annaly's dividend. The ex-dividend date is Dec. 26, and the dividend should hit our account on Jan. 29.

With all the pressure on the tobacco company, fellow Fool Austin Smith takes a look at whether Philip Morris is a buy today and what to watch for in 2013 in this video. Philip Morris goes ex-dividend on Dec. 24 and pays out $0.85 per share on Jan. 11.

Eminence Capital joined the ranks of Vodafone shareholders recently. The $3.3 billion  hedge fund noted the position in its recently filed 13-F. Vodafone's 45% stake in Verizon Wireless continues to be an attractive asset, and there has been speculation that the U.K. telecom giant could monetize it. Vodafone pays a nearly 6% dividend, and I continue to like it.

Fellow Fool Dan Caplinger examines whether Frontier will help you retire rich. Dan notes, "Revenue continued to drop sequentially, with continuing falls in residential customer counts and free cash flow." As I've mentioned before, Frontier is on my short list to sell, if it reaches the right price. It won't be much longer until the next earnings report, and I'll reassess the situation at that time.

Dividends and earnings announcements
Dividend news: 

  • Vodafone went ex-dividend on Nov. 20 and pays out $0.519 per share on Feb. 6.
  • Brookfield Infrastructure went ex-dividend on Nov. 28 and pays out $0.375 per share on Dec. 31.
  • National Grid went ex-dividend on Nov. 28 and pays out nearly $1.15 per share on Jan. 16.
  • Annaly Series C went ex-dividend on Nov. 29 and pays out almost $0.48 per share on Dec. 31.
  • Frontier went ex-dividend on Dec. 5 and pays out $0.10 per share on Dec. 31.
  • Philip Morris goes ex-dividend on Dec. 24 and pays out $0.85 per share on Jan. 11.
  • Annaly goes ex-dividend on Dec. 26 and pays out $0.45 per share on Jan. 29.

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 probably have stocks plunging again. 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 these 13 tickers along with the nine names from a brand-new, free report from The 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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