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. 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

Southern

$39.71

25.0818

4.3%

$1,159.53

16.4%

Exelon (NYSE: EXC  )

$41.36

28.818

5.9%

$1,027.07

(13.8%)

National Grid

$48.90

20.3693

5.4%

$1,148.42

15.3%

Philip Morris International

$68.49

14.5429

3.9%

$1,275.85

28.1%

Annaly Capital (NYSE: NLY  )

$17.79

72.5

12.6%

$1,152.03

(10.7%)

Frontier Communications

$7.88

126.4243

8.6%

$604.31

(39.3%)

Plum Creek Timber

$38.42

26

3.8%

$1,144.26

14.5%

Brookfield Infrastructure Partners

$26.12

38.2825

4.4%

$1,297.78

29.8%

Vodafone

$26.52

37.5566

5.4%

$1,038.06

4.2%

Seaspan

$15.14

89

6.3%

$1,410.65

4.7%

AT&T (NYSE: T  )

$35.20

28.4

5.1%

$979.80

(2%)

Retail Opportunity Investments

$12.20

81.95

4.4%

$1,038.31

3.9%

Annaly Preferred C

$25.98

38.5

7.5%

$984.45

(1.6%)

Cash

     

$11.59

 

Dividends Receivable

     

$48.75

 

Original Investment

     

$12,983.97

 

Total Portfolio

     

$14,320.85

10.3%

Investment in SPY

(including dividends)

       

8.5%

Relative Performance

(percentage points)

       

1.8

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

Our portfolio was down for the week, moving from 12.5% to 10.3%. But the S&P moved down even more, increasing our lead from 0.6 percentage points to 1.8. Our blended yield increased to 5.8%. We have two cash dividends coming into the portfolio in the next week, from Annaly and AT&T. I'm confident in the long-run performance of this dividend portfolio, and I expect time will bear us out. With the global economy on the brink of another recession, dividends should outperform. If I have to have my money somewhere, dividend stocks are the place.

Annaly was saddened by the loss this week of founder and co-CEO Michael Farrell, to cancer. Along with Annaly co-CEO Wellington Denahan-Norris, Farrell co-founded FIDAC, the advisory company behind Annaly and peers Chimera Investment (NYSE: CIM  ) and CreXus Investment (NYSE: CXS  ) . Farrell was highly regarded in the industry, but Annaly should continue to be in good hands under Denahan-Norris, who has been the chief investment officer at FIDAC for the last 15 years.

What does it all mean for Annaly? Fellow Fool Amanda Alix gives her take on the news here, while my Foolish colleague Anand Chokkavelu adds his perspective in this video.

Exelon declared its next dividend: a $0.525 per-share payout on December 10 to investors of record on November 15. I continue to remain intrigued by Exelon's high yield in this environment. And AT&T serves up another dividend to investors next week. How has that company done over the last decade? Fellow Fool Anders Bylund gives you the details of AT&T's very good performance in this article.

Dividends and earnings announcements
Here is the relevant news about earnings and dividends:

Dividend news:

  • Annaly went ex-dividend on September 27, and pays out $0.50 per share on October 29.
  • AT&T went ex-dividend on October 5, and pays out $0.44 per share on November 1.

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 up more shares.

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 13 tickers above, along with the nine names from a brand-new, 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, Ph.D., owns shares of the 13 portfolio stocks mentioned in the table. The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services recommend Exelon and AT&T. 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 (0) | Recommend This Article (9)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2080334, ~/Articles/ArticleHandler.aspx, 11/21/2014 10:14:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement