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The World's Best Dividend Portfolio

Jim Royal
June 1, 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 here. Now let's check out the results so far.


Cost Basis



Total Value


Southern $39.71 25.0818 4.3% $1,151.51 15.6%
Exelon $41.36 23.818 5.7% $1,065.69 (10.6%)
National Grid $48.90 20.3693 5.7% $1,024.37 2.8%
Philip Morris International $68.49 14.5429 3.6% $1,229.02 23.4%
Annaly Capital $17.92 65.5 13.3% $1,088.61 (7.3%)
Frontier Communications $7.88 126.4243 11.2% $472.83 (52.5%)
Plum Creek Timber $38.42 26 4.6% $949.00 (5%)
Brookfield Infrastructure Partners $26.12 38.2825 4.8% $1,198.24 19.8%
Vodafone $26.52 37.5566 5% $1,006.14 1%
Seaspan $14.90 76 6.2% $1,234.24 9%
Cash       $18.89  
Dividends Receivable       $97.66  
Original Investment       $9,986.58  
Total Portfolio       $10,536.20 5.5%
Investment in SPY (including dividends)         3.9%
Relative Performance (percentage points)         1.6

Source: S&P Capital IQ.

Our portfolio held its own this week, maintaining its 5.5% cumulative return with the help of some dividend payouts. Meanwhile, the S&P index fell to 3.9%, meaning we're up by 1.6 percentage points on our benchmark. So after nearly a year, we're beating the index and have a substantially better blended yield -- 6.1% -- than the index at 1.9%. If markets continue to be stagnant or down, we should probably outperform. And I don't see a whole lot that is positive in the next few months. Growth is slowing in various places across the globe, and Europe is a mess that is not being fixed yet.

With the ongoing dust-up in global markets, I continue to like Annaly Capital (NYSE: NLY  ) . If things get worse, Annaly could continue to be a place where investors flee. Its strong yield and track record of growing book value bode well for shareholders. At least for the moment, that beats out its recent record of declining net interest margin.

Our portfolio recently acquired shares of Exelon (NYSE: EXC  ) for its quite high yield. Fellow Fool Robert Eberhard took a look at Exelon and other high-yield utilities according to a metric called the Graham number, and he found Exelon to be underpriced. You can read the article here. And its 5.7% yield is quite high, and it still has one of the lowest debt ratios of major utilities.

Some fellow Fools also like the prospects at Vodafone (Nasdaq: VOD  ) better than some of its stateside rivals. You can see why in this article. Just last week, the company reported that it expected lower cash flow of $8.3 billion to $9 billion, down from 2011's $9.5 billion.

Philip Morris (NYSE: PM