NextEra Energy Raises Its Dividend While Ford Drives Home Big Overseas Sales Growth

A three-year-long experiment intent on showing that life's most basic needs can result in market-beating portfolio gains, hefty dividend income, and a good night's sleep!

Feb 18, 2014 at 6:15PM

In May, I announced my intention to create a portfolio that embodied life's basic needs. To that end, over a period of 10 weeks, I detailed 10 diverse companies that I think will outperform the broad-based S&P 500 over a three-year period because of their ability to outperform in both bull markets and bear markets, as well as their incredible pricing power in nearly any economic environment.

If you'd like a closer look at my reasoning behind each selection, just click on any, or all, of the following portfolio components:

Let's look at how our portfolio of basic-needs stocks has fared since we began this experiment.


Cost Basis


Total Value


Waste Management










NextEra Energy















Select Medical










American Water Works





Procter & Gamble





AvalonBay Communities









Dividends receivable




Total commission




Original Investment




Total portfolio value




S&P 500 performance



Performance relative to S&P 500



Source: Yahoo! Finance, author's calculations.

With a little more than half of this portfolio having reported earnings for the quarter, and the remainder due up over the next two weeks, this past week was primarily spent watching dividends be issued, declared, or recorded.

Show me the money!
There's nothing that I enjoy more than coming back from a holiday and receiving a dividend payment, which is exactly what happened to shareholders of consumer goods giant Procter & Gamble (NYSE:PG). Reflected in the dividends receivable column above is the $0.6015 per share that shareholders on record as of Jan. 24 received today.Reflected in the dividends receivable column above is the fact that on Tuesday, Procter & Gamble shareholders will be $0.6015 richer per each share that they own. Having raised its dividend in each of the past 57 years, P&G offers one of the safest dividends on Wall Street. With A.G. Lafley at the helm and the company consistently producing mid-single-digit organic volume growth, I see no reason this dividend growth streak won't continue again this year.

Integrated oil and gas giant Chevron (NYSE:CVX) didn't put any more money in our pocket just yet, but it did go ex-dividend on Wednesday of last week. The $1.00 per share stipend is payable on March 10 to shareholders on record as of Valentine's Day. The real gift of love, though, is the current 3.5% yield, which is well above its larger rival ExxonMobil at just 2.7%. Although Chevron has encountered softness in its bottom line due to refining weakness in recent months, its diverse asset portfolio, including its massive natural gas fields off the coast of Australia, should easily fuel profit and dividend growth for decades.

Finally, electric utility NextEra Energy (NYSE:NEE) on Friday declared a quarterly dividend of $0.725, which is an increase of 9.8% over the $0.66 it paid out in the previous quarter. According to the press release from NextEra, the dividend increase is consistent with the company's proposed plan targeting a payout ratio of approximately 55% relative to its adjusted earnings. The dividend will be payable on March 17 to shareholders on record as of Feb. 28, and it boosts NextEra's annual yield up to a respectable 3.1%. This also marks the 15th time NextEra has raised its dividend just since 2000. With a clear advantage in long-term energy costs over its peers, it looks like smooth sailing for NextEra shareholders.

In cruise control overseas
Automaker Ford (NYSE:F) may have faced some rough comparisons in January in the United States because of inclement weather, but it was in cruise control in two of its other major overseas markets. On Wednesday, Ford reported that unit sales grew by 53% in China to 94,466 wholesale vehicles, with an 8% gain in Ford Focus sales and a number of new product initiatives pushing unit volume higher. Even Europe delivered industry-topping growth with unit sales on Friday reported to be up 9.2% in the region compared to 4.7% for the industry as a whole. It marked the eighth straight month of sales unit expansion in the region and allowed Ford to gain 0.4% market share in Europe during the month. Obviously, the auto market is very competitive domestically and overseas, but Ford's sleek designs and proprietary EcoBoost technology appear to be making all the difference at the moment.

Let's make a deal
Finally, as Bloomberg noted on Tuesday, Google has officially displaced Intel (NASDAQ:INTC) among the top spot for deal-making over the past three years. According to Bloomberg's data, Google has been involved in 127 deals totaling $17.6 billion over the past three years, while Intel orchestrated 121 deals in the comparable period. While it might seem disappointing for Intel to lose this title, I'm not surprised given that it's focused on developing organic processing solutions for the cloud-based market. As long as it continues to dominate the PC market and generates significant cash flow there, it'll be able to funnel those operating profits into new research and development initiatives. It may have lost its title of top dealmaker, but it's going to gain so much more by innovating in-house.

Back to basics
The past week saw pretty sizable, yet comparable, gains for both the S&P 500 and the Basic Needs Portfolio. As I've stated in the past, this portfolio wasn't designed to beat the S&P 500 on a week-to-week basis, but instead, through consistent cash flow and healthy dividend growth, trounce the S&P 500 over the long term. Nothing over these past six months has changed my perception on any of these 10 stocks, so I'm merely looking forward to sitting back and letting inelastic demand and prices work in my favor over the long run.

This is the "secret" that will allow this portfolio to dominate over the long run
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of, and recommends Ford, Intel, MasterCard, Google, and Waste Management. It also recommends Chevron and Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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