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, 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.

Company

Cost Basis

Shares

Yield

Total Value

Return

Awilco Drilling

$23.25

56

20.6%

$1,248.80

(4.1%)

CorEnergy Infrastructure

$6.93

144

7.3%

$1,013.76

1.6%

Philip Morris International

$78.05

25.5429

4.3%

$2,231.43

11.9%

Extendicare (NASDAQOTH: EXETF  )

$6.51

548

6.5%

$3,699.00

3.7%

Ryman Hospitality

$40.96

39.3

4.8%

$1,785.79

10.9%

Plum Creek Timber (NYSE: PCL  )

$38.42

26

3.9%

$1,168.83

17%

Brookfield Infrastructure Partners (NYSE: BIP  )

$26.12

38.2825

4.6%

$1,558.44

55.9%

Seaspan

$17.17

136.5

5.9%

$3,155.88

34.6%

Retail Opportunity Investments

$12.20

81.95

4%

$1,275.14

27.5%

Gramercy Property Trust

$4.48

223

2.4%

$1,304.55

30.6%

Cash

     

$1,551.33

 

Dividends Receivable

     

$122.99

 

Original Investment

     

$14,983.36

 

Total Portfolio

     

$20,115.94

34.3%

Investment in SPY (including dividends)

       

43.2%

Relative Performance (percentage points)

       

(8.9)

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

The total portfolio is now up 34.3% after climbing a strong 4.8 percentage points since the last report. Dividend and value stocks have performed well, but we also have some specific catalysts that are propelling the performance here (more later). We're now down on the index by 8.9 percentage points cumulatively -- after gaining 2.6 percentage points since the last report. The blended yield slipped to 6.2%.

We have had a number of transactions in the last few weeks. I think these will help the portfolio perform extremely well over the next few years. In last week's column I posted what I think are the top five stocks for the portfolio and how they could perform over the next year or so.

Some of the recent outperformance is due to Extendicare, which comprises over 18% of the current portfolio. The stock has moved up recently as it nears its self-announced June due date for clearing up the ongoing government investigation of its American unit. That would precede any sale of the American business, for which the company appears to have a buyer. This remains my top position in the portfolio because of the low price we're paying for the American business.

You may notice the cash balance way up. That's due to my announced sale of National Grid (NYSE: NGG  ) , which, by my calculations, was pricing in less than 10% annual growth. As I noted in last week's column, I think the portfolio has a number of positions that could return over 20% annually for a number of years. If the price were to decline substantially from here, I'd be inclined to buy the stock again.

For now, though, we have over $1,500 in cash in the portfolio. I'm looking at a couple ideas that I think will be outperformers over the next few years. As always, I'll let you know in this column what I decide.

Dividend announcements
Dividend news:

  • Plum Creek went ex-dividend on May 14 and pays out $0.44 per share on May 30.
  • Exelon went ex-dividend on May 14 and pays out $0.31 per share on June 10.
  • Brookfield Infrastructure went ex-dividend on May 28 and pays out $0.48 per share on June 30.
  • Extendicare went ex-dividend on May 28 and pays out $0.0362 per share on June 16.

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; 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.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That’s beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (3) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 02, 2014, at 12:13 PM, ALLWIN wrote:

    Jim, please allow me one question:- Is there a reason or what is the reason, why no stock from the BDC' sector has ever been part of the World's Best Dividend Portfolio? Stocks from REIT's, MLP's Utilities etc have been included at some time, but nothing from the BDC sector. Some stock i this sector yields a decent dividend!. Your comments would be most appreciated.

  • Report this Comment On June 02, 2014, at 4:06 PM, TMFRoyal wrote:

    ALLWIN, BDCs are more complicated because you have to understand more component companies. That's not something I want to do.

    Jim

  • Report this Comment On June 02, 2014, at 5:02 PM, ALLWIN wrote:

    Jim, much thanks for providing this insight ad comment.

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