The World's Best Dividend Portfolio

The latest news on these dividend dynamos.

Jul 17, 2014 at 12:46PM

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

18.7%

$1,379.28

5.9%

CorEnergy Infrastructure

$6.93

144

6.4%

$1,166.40

16.9%

NorthStar Realty Finance

$17.04

175

8.8%

$2,882.25

(3.3%)

Philip Morris International

$78.05

25.5429

4.4%

$2,163.48

8.5%

Extendicare (TSX:EXE) (NASDAQOTH:EXETF)

$6.51

548

6.6%

$3,638.72

2%

Ryman Hospitality

$40.96

39.3

4.5%

$1,950.07

21.1%

Plum Creek Timber  

$38.42

26

4%

$1,155.70

15.7%

Brookfield Infrastructure Partners

$26.12

38.2825

4.8%

$1,547.76

54.8%

Seaspan

$17.17

136.5

5.8%

$3,235.05

38%

Gramercy Property Trust

$4.48

223

2.3%

$1,333.54

33.5%

Cash

     

$66.13

 

Dividends Receivable

     

$0.00

 

Original Investment

     

$14,983.36

 

Total Portfolio

     

$20,518.38

36.9%

Investment in SPY

(including dividends)

       

48%

Relative Performance

(percentage points)

       

(11)

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

The total portfolio is now up 36.9% after declining 1.4 percentage points since the last report. We're now down on the index by 11 points cumulatively after losing 1.1 percentage points on a relative basis. The market has really revived itself in the past few weeks, and that usually means our stocks underperform during that period. And so it was this time, too. But dividend stocks remain a great investment over the long term.

The blended yield climbed to 6.6%. The major reason for the change was the previously announced purchase of NorthStar Realty Finance. For the time being, and for the purpose of calculating the blended yield, I've assumed the company is paying out $1.50 per share, for nearly a 9% yield at today's prices. I'll adjust that if and when necessary, as the company announces its official dividend going forward.

The new position in NorthStar is a healthy chunk of the portfolio. So using the cash on hand as well as the proceeds from the sale of Retail Opportunity Investments, I purchased NorthStar. I think the stock has good upside from here. You can read my expectations for the stock in the following article.

We continue to take a wait-and-see approach on Extendicare. The upside here is so substantial that it mitigates the delays that are so frustrating. We could know at any time that it has sold its American unit and resolved the ongoing government investigation. In any case, we should get some further details during its earnings announcement in a few weeks. While we wait, the company continues to pay out a nice dividend, which annualizes to 6.6% at current stock prices.

Dividend announcements
Dividend news:

  • Extendicare went ex-dividend on June 26 and paid out $0.0362 per share on July 15.
  • Gramercy went ex-dividend on June 26 and paid out $0.035 per share on July 15.
  • Ryman went ex-dividend on June 25 and paid out $0.55 per share on July 15.
  • Philip Morris went ex-dividend on June 24 and paid out $0.94 per share on July 11.
  • Extendicare goes ex-dividend on July 28 and pays out $0.0362 per share on July 15.

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.

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.

Jim Royal owns shares of all 10 companies listed in the table and the following options: long January 2016 $17 calls on NorthStar Realty Finance. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool owns shares of CorEnergy Infrastructure Trust, Extendicare, Gramercy Property Trust, NorthStar Realty Finance, Ryman Hospitality Properties, and 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.

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