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%

$1,108.87

11.3%

Exelon

$41.36

28.818

7%

$875.78

(26.5%)

National Grid (NYSE: NGG  )

$48.90

20.3693

5.7%

$1,127.24

13.2%

Philip Morris International (NYSE: PM  )

$68.49

14.5429

3.8%

$1,305.37

31.1%

Annaly Capital

$17.79

72.5

12.1%

$1,073.73

(16.8%)

Frontier Communications (NASDAQ: FTR  )

$7.88

126.4243

8.8%

$566.38

(43.1%)

Plum Creek Timber

$38.42

26

3.5%

$1,248.00

24.9%

Brookfield Infrastructure Partners

$26.12

38.2825

4.1%

$1,418.37

41.8%

Vodafone (NASDAQ: VOD  )

$26.52

37.5566

6%

$1,005.77

1%

Seaspan

$15.24

95

5.5%

$1,739.45

20.2%

AT&T

$35.20

28.4

5.2%

$958.50

(4.1%)

Retail Opportunity Investments

$12.20

81.95

4.3%

$1,072.73

7.3%

Annaly Preferred C

$25.98

38.5

7.5%

$982.52

(1.8%)

Cash

     

$113.87

 

Dividends Receivable

     

$64.90

 

Original Investment

     

$12,983.97

 

Total Portfolio

     

$14,661.45

12.9%

Investment in SPY (Including Dividends)

       

14.6%

Relative Performance (Percentage Points)

       

(1.7)

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

The portfolio is up 12.9%, a solid 1.9-percentage-point boost from last week. The S&P went up, but not quite as much, so we moved up relatively, from 2.5 percentage points back to 1.7. In a few weeks, we'll have the next wave of dividends rolling into the portfolio, which should help us do well in the near term.

The portfolio is now yielding 5.7% -- about three times the S&P -- and we have more than $110 in cash in the account and about $65 more on the way within two weeks. With more than $100 in cash, that means it's time to reinvest. I'll continue to ponder where those funds should go.

Speculation has been running wild that Verizon (NYSE: VZ  ) might buy out joint-venture partner Vodafone's share of Verizon Wireless, or even just buy out Vodafone as a whole and spin off the non-JV operations. Fellow Fool Sam Robson has more on why you should like Vodafone in this article.

Fellow Fool Dan Caplinger asks, "Has Frontier become the perfect stock?" Dan notes the impressive yield, of course, but also cautions that the company isn't doing as well as peers Windstream and CenturyLink in terms of diversifying away from a declining wireline business. You can read the full article here.

I like National Grid for its high dividend yield, but Fool G.A. Chester notes three things that he hates about the company, including one of my pet peeves. As he says, the company has been awful about share buybacks, purchasing at the height of the bull market and then suspending the program during the worst of the market crash. Even worse, the company then had to reissue shares at a 55% discount to the price it paid. You can read what else he hates here. There are some goodies.

Fool blogger Leo Sun calls Indonesia an attractive market for tobacco superstar Philip Morris. The country is the world's fourth largest and has increasing rates of smoking. But it's not without challenges, as Leo notes. You can read the full blog here.

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

Dividend news: 

  • Vodafone went ex-dividend on Nov. 20 and pays out $0.519 per share on Feb. 6.
  • National Grid went ex-dividend on Nov. 28 and paid out nearly $1.15 per share on Jan. 16.
  • Philip Morris went ex-dividend on Dec. 24 and paid out $0.85 per share on Jan. 11.
  • Annaly went ex-dividend on Dec. 26 and pays out $0.45 per share on Jan. 29.
  • AT&T went ex-dividend on Jan. 8 and pays out $0.45 per share on Feb. 1.
  • Southern goes ex-dividend on Jan. 31 and pays out $0.49 per share on March 6.

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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