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The World's Best Dividend Portfolio

http://www.fool.com/investing/dividends-income/2012/05/11/the-worlds-best-dividend-portfolio.aspx

Jim Royal
May 11, 2012

In June 2011, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offer triple the yield of the average S&P 500 stock. You can read all the details for yourself. Now let's check out the results so far.

Company

Cost Basis

Shares

Yield

Total Value

Return

Southern $39.71 25.0818 4.3% $1,144.98 15%
Exelon (NYSE: EXC  ) $41.36 23.818 5.5% $1,122.17 (5.8%)
National Grid $48.90 20.3693 5.5% $1,106.26 11.1%
Philip Morris International $68.49 14.5429 3.6% $1,253.02 25.8%
Annaly Capital (NYSE: NLY  ) $17.92 65.5 13.3% $1,093.20 (6.9%)
Frontier Communications (NYSE: FTR  ) $7.88 126.4243 11.9% $442.49 (55.6%)
Plum Creek Timber $38.42 26 4.3% $1,005.42 0.7%
Brookfield Infrastructure Partners (NYSE: BIP  ) $26.12 38.2825 4.8% $1,189.05 18.9%
Vodafone $26.52 37.5566 4.9% $1,044.82 4.9%
Seaspan $14.90 76 4.3% $1,330.00 17.5%
Cash       $7.97  
Dividends Receivable       $23.22  
Original Investment       $9,986.58  
Total Portfolio       $10,762.60 7.8%
Investment in SPY (Including Dividends)         7.4%
Relative Performance (Percentage Points)         0.4

Source: S&P Capital IQ.

In the past week, our total portfolio performance declined by a half-percentage point, to 7.8%. But we climbed substantially on the S&P, moving from 1.7 points down to 0.4 points above the index. So we're back to outperforming, and we're sporting a blended yield of 5.8%, versus the 1.9% of the S&P. The recent lackluster performance in the broader market has certainly improved the relative performance of our dividend portfolio, notwithstanding the brutal performance of Frontier Communications this past week. Europe continues to founder, China continues to slow, and equities are sinking -- so I'm happy to continue to hold this portfolio.

I went over Annaly's results last week and talked about how I was neutral on them, given stagnant earnings per share yet higher leverage. The stock and that of peer American Capital Agency (Nasdaq: AGNC  ) have been moving up in recent weeks, as investors move to safer investments. As agency mortgage REITs, their mortgages are backed by the U.S. government. For those who are concerned about declining dividends in either stock, one alternative that could work fo