The World's Best Dividend Portfoliohttp://www.fool.com/investing/dividends-income/2013/03/09/the-worlds-best-dividend-portfolio-16.aspx James Royal
March 9, 2013
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.
The portfolio is up 17%, since we began this experiment, and we're trailing the S&P by 1.7 percentage points. That might not be surprising given the massive run the market's been on over the past few months. Remember, we expect to outperform in down markets and underperform in up markets. We have a load of new cash in our pocket, which we could deploy soon, and several other significant portfolio changes to make.
I'm selling my stake in Frontier. The company continues to see shrinking free cash flow -- now projected at $875 million (midpoint) for 2013. While that solidly covers the dividend, free cash flow just continues to shrink. I'll be rolling over those proceeds into Vodafone. The rumors continue to swirl that Verizon wants Vodafone's 45% stake in their joint venture, Verizon Wireless. Estimates I've seen of the value of that stake equal nearly all of Vodafone's market cap today. And with a means to effect a tax-free transaction, that value could be realized this year. Meanwhile, Vodafone offers a smaller, though by no means small, dividend that is much more likely to stick around longer term.
Second, I'm selling my stake in Annaly and moving the funds to Ryman Hospitality Properties (NYSE: RHP). You can read the lowdown on Ryman here, but the short story is that the company just converted to a REIT a co