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This High-Yield Portfolio Will Beat the Market

Forty-three weeks ago, I invested my cold, hard cash into 10 high-yield dividend stocks I believe will beat the market. Let's see the results so far:


Average Cost


Recent Price

Total Value


Altria (NYSE: MO  ) $24.86 40 $28.73 $1,149.20 15.57%
Philip Morris (NYSE: PM  ) $61.83 17 $74.86 $1,272.62 20.14%
National Grid (NYSE: NGG  ) $45.63 22 $46.81 $1,029.82 2.59%
Annaly Capital Management (NYSE: NLY  ) $17.55 57 $16.22 $924.54 (7.58%)
Frontier Communications (NYSE: FTR  ) $8.71 149 $4.87 $725.63 (44.09%)
Southern Co. (NYSE: SO  ) $37.87 26 $44.14 $1,147.64 16.56%
France Telecom (NYSE: FTE  ) $22.23 45 $15.53 $698.85 (30.14%)
Vodafone Group $28.69 38 $27.04 $1,027.52 (5.75%)
Eli Lilly $34.48 29 $40.04 $1,161.16 16.13%
Bristol-Myers Squibb $25.37 39 $33.74 $1,315.86 32.99%
Cash   46.51   46.51 0%
Dividends Receivable   52.06   52.06 0%
Total Portfolio       $10,551.41 5.51%
Investment In SPY         (6.31%)
Return vs. SPY (percentage points)         +11.82

Source: S&P Capital IQ, as of Dec. 14.

Since my last report, the SPDR S&P 500 fell 2.1%. Our portfolio fell less than the market, with our outperformance moving from beating the market by 10.75 percentage points to an 11.82-point advantage. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's only been nine months.

Movers and shakers
Since this portfolio began, our telecom holdings have been our most volatile. The past two weeks proved to be no exception, as Frontier fell 15% and France Telecom fell 10%.

There are six upcoming dividends for the portfolio:

  • Frontier will pay a dividend of $0.1875 on Dec. 30. The ex-dividend date was Dec. 7.
  • National Grid will pay a dividend of $1.09 on Jan. 18. The ex-dividend date was Nov. 30.
  • Altria will pay a dividend of $0.41 on Jan. 10. The ex-dividend date is Dec. 22.
  • Philip Morris International will pay a dividend of $0.77 on Jan. 10. The ex-dividend date is Dec. 20.
  • Vodafone will pay a dividend of 0.705 pence (roughly $1.12, not included in dividends receivable as exchange rate won't be determined until Jan. 20) on Feb. 3. The ex-dividend date was Nov. 16.
  • Eli Lilly will pay a dividend of $0.49 on March 9. The ex-dividend date is Feb. 13.

My Foolish bottom line
I'm highly confident in this portfolio's ability to crush the market over the next decade, and that's why I put $10,000 of my personal cash into these stocks. My strategy is simple. I'm buying strong companies with outsized dividends, reinvesting those dividends, and holding them for the long run. Over the coming year, I'll track my performance, update you on when I'm going to reinvest all my dividends, and keep you abreast of news affecting these companies.

Consider the 10 tickers above along with the 11 names from a brand-new free report from Motley Fool expert analysts called "11 Rock-Solid Dividend Stocks." To get instant access to the names of these 11 dividend stocks, click here -- it's free.

Dan Dzombak can be found on his Twitter account: @DanDzombak. He owns shares of Altria, Philip Morris, National Grid, Annaly Capital, Frontier, Southern Co., France Telecom, Vodafone, Eli Lilly, and Bristol-Myers Squibb.

The Motley Fool owns shares of Altria Group, Philip Morris International, and Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Southern, France Telecom, Philip Morris International, Vodafone Group, and National Grid. 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.

Read/Post Comments (2) | Recommend This Article (15)

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 December 16, 2011, at 1:26 PM, jonkai wrote:

    you have a negative return for NLY??? you apparently didn't include the Dividends? and you should "reinvest" the dividends in NLY, which would have boosted the total return even higher... you need to refigure your "returns" since you didn't do this...

    (also, NLY has a dividend coming soon too, which you left off that part too)

  • Report this Comment On December 19, 2011, at 5:56 PM, 1caflash wrote:

    Monday December 19, 2011, I sold all my FTR shares, raised some cash and I am taking a large short-term tax loss against my 2011 gains. Also, Friday December 16, 2011, I sold all my T shares before AT&T announced a dividend increase and that it is giving up the gigantic T-Mobile deal, while paying the huge break-up fee. This is like a former husband making an alimony payment. I believe Century Link and Verizon have much to gain from T's miscue. I viewed a fine internet video from Motley Fool about Waste Management. An obscure rock group in the 1970's called "Small Wonder" did one of my favorite songs, "Why Walk When You Can Dance?" I say "Why Watch When You Can Buy?" Waste Management, Hickory Tech (HTCO) and MFA are my latest additions to my portfolio as well as a larger Cash position. December 19, 2011, CIM declared an 11 cents-per-share dividend which is still a healthy return for an investment of 17,000 shares and will give me 623 or more shares by February 2012 if the price-per-share is $3.00 or less. Stay invested, have a healthy cash balance going into 2012 for more opportunities in your favorite stocks and May You Be Blessed With Joyous And Safe Holidays.

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