The World's Best Dividend Portfolio

The latest news on these dividend dynamos.

Jul 24, 2014 at 10:45AM

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%

$1,433.60

10.1%

CorEnergy Infrastructure

$6.93

144

6.3%

$1,180.80

18.3%

NorthStar Realty Finance

$17.04

175

8.8%

$2,961.00

(0.7%)

Philip Morris International (NYSE:PM)

$78.05

25.5429

4.4%

$2,173.19

9%

Extendicare (NASDAQOTH:EXETF)

$6.51

548

6.5%

$3,688.04

3.4%

Ryman Hospitality

$40.96

39.3

4.4%

$1,961.07

21.8%

Plum Creek Timber  

$38.42

26

4%

$1,145.04

14.6%

Brookfield Infrastructure Partners

$26.12

38.2825

4.7%

$1,576.47

57.7%

Seaspan

$17.17

136.5

5.7%

$3,274.64

39.7%

Gramercy Property Trust

$4.48

223

2.3%

$1,373.68

37.5%

Cash

     

$66.13

 

Dividends Receivable

     

$47.09

 

Original Investment

     

$14,983.36

 

Total Portfolio

     

$20,880.75

39.4%

Investment in SPY

(including dividends)

       

48.5%

Relative Performance

(percentage points)

       

(9.1)

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

The total portfolio is now up 39.4% after climbing 2.5 percentage points in the last week -- not too bad. We're now down on the index by 9.1 points cumulatively after gaining 1.9 points on a relative basis. Surprisingly, despite an upward market, the portfolio outperformed. The blended yield remained at 6.6%.

As I announced last week, I've added NorthStar Realty Finance to the portfolio. I expect its yield to be a healthy 9% or so at current prices, and that's how I've figured the blended yield for the portfolio. We should get more definitive details on the earnings report on Thursday, Aug. 7. So that's one to watch. In the meantime, my Special Situations portfolio continues to buy more.

We continue to wait on results from 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 on Thursday, Aug. 7. The company continues to pay out a nice dividend, which annualizes to 6.6% at current stock prices. That's a huge inducement to be patient.

We got results from our largest company, Philip Morris, and the results were favorable. The company beat earnings estimates, putting up $1.41 in earnings per share versus estimates of $1.24. And revenue came in higher than expected as well. Currency headwinds were not as strong as expected, helping to buoy earnings. While the stock has been relatively stagnant recently, it trades at a reasonable 16 times earnings and offers a meaty 4%-plus yield, making it one of the most attractive megacap stocks.

Dividend announcements
Dividend news:

  • Seaspan went ex-dividend on July 16 and pays out $0.375 per share on July 30.
  • 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 BIP, NGG. The Motley Fool owns shares of NRF, CORR, EXETF, GPT, RHP, and SSW. 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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