The World's Best Dividend Portfolio

The latest news on these dividend dynamos.

Feb 24, 2014 at 5:18PM

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, and then more again in 2013. 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








National Grid






Philip Morris International (NYSE:PM)












Ryman Hospitality






Plum Creek Timber






Brookfield Infrastructure Partners












Retail Opportunity Investments






Annaly Preferred D






Gramercy Property Trust










Dividends Receivable




Original Investment




Total Portfolio




Investment in SPY

(including dividends)



Relative Performance

(percentage points)



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

The total portfolio is now up 24.6%, after declining 1.1 percentage points from the last report. We lost on the index, by a full percentage point, to lag by 12.7 points. The blended yield ticked up to 5.1%. Dividends and dividends receivable continued to flow into the account, and there's plenty more on the way.

I've decided to break down the stock weighting in the portfolio by percent, since it's clearer than the dollar-based calculations in the table above. So here's how the stocks in the portfolio stand today:





National Grid


Philip Morris International




Ryman Hospitality


Plum Creek Timber


Brookfield Infrastructure Partners




Retail Opportunity Investments


Annaly Preferred D


Gramercy Property Trust


As you can see, the portfolio is heavily weighted toward three stocks -- Philip Morris, Extendicare, and Seaspan. From this point I think those have excellent odds to outperform. The latest addition to the portfolio is Extendicare. I've given my rational for purchasing the Canadian health care provider in previous articles. I also own it in my Special Situations portfolio.

Extendicare pays a very healthy 6.7% yield and has a ton of hidden value in the American unit, which it is seeking to divest, either through a sale or spinoff. In this article I run through some numbers and calculate that buyers of the stock in the low $6s could be getting the business for free. That's my type of value proposition. You can read the whole article here.

As for Philip Morris, you might be concerned about the sustainability of its high dividend. But fellow Fool Rupert Hargreaves breaks down in this article how the company can keep paying out its dividend. The short answer: it still can. Have a look at the numbers yourself.

I expect the yield to rise in the near future, as two of my favorite stocks, Seaspan and Gramercy, announce dividend increases.

We own the high-yield Annaly preferred in this portfolio, so why not the high-yield Seaspan preferred? The switch to Annaly's preferred was motivated by the desire for a high-yield security while the common stock's dividend and price continued to wither. I think that's still the case for Annaly. I own Seaspan common for nearly the exact opposite reason: there the dividend on the common should grow quickly.

The shipping company just came out with a new preferred stock series that yields 8.25% at par. And obviously that's more than we're getting with the common stock, now at 5.5%. The reason is that the common stock dividend has the potential for significant growth over the next few years. Seaspan raised cash from that preferred stock in order to build out its fleet, a move that allows the company to continue to increase its dividend over the next 4-5 years. I think 20% a year over that period is still possible. So we'll end up with a much higher yield on cost by sticking to the common.

Dividend announcements

Dividend news:

  • Plum Creek went ex-dividend on Feb. 12 and pays out $0.44 per share on Feb. 28.
  • Extendicare goes ex-dividend on Feb. 26 and pays out $0.0362 per share on March 17.
  • Exelon went ex-dividend on Feb. 12 and pays out $0.31 per share on Mar 10.
  • Seaspan went ex-dividend on Feb. 13 and pays out $0.3125 per share on Feb. 26.
  • Brookfield Infrastructure goes ex-dividend on Feb. 26 and pays out $0.48 per share on Mar 10.
  • Annaly Series D goes ex-dividend on Feb. 27 and pays out nearly $0.47 per share on Mar 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 11 tickers above along with the nine names from a 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 owns shares of all 11 companies listed in the table and Extendicare and has the following options: long May 2014 $22 calls on Seaspan and short May 2014 $30 calls on Seaspan. The Motley Fool owns shares of Extendicare, Gramercy Property Trust, Retail Opportunity Investments, Ryman Hospitality Properties, and Seaspan and has the following options: long May 2014 $22 calls on Seaspan and short May 2014 $25 calls on 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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