Twenty-one weeks ago, I invested my cold hard cash into 10 high-yield dividend stocks I believe will beat the market. Let's see the results so far:
|
Company |
Average Cost |
Shares |
Recent Price |
Total Value |
Return |
|---|---|---|---|---|---|
|
Altria |
$24.86 | 40 | $26.93 | $1,077.20 | 8.33% |
|
Philip Morris |
$61.83 | 16 | $68.68 | $1,098.88 | 11.08% |
|
National Grid |
$45.63 | 22 | $48.77 | $1,072.94 | 6.88% |
|
Annaly Capital Management |
$17.55 | 57 | $18.32 | $1,044.24 | 4.39% |
|
Frontier Communications |
$9.14 | 125 | $8.00 | $1,000.00 | (12.50%) |
| Southern Co. | $37.87 | 26 | $40.14 | $1,043.64 | 5.99% |
|
France Telecom |
$22.23 | 45 | $19.55 | $879.75 | (12.06%) |
|
Vodafone Group |
$28.88 | 34 | $26.19 | $890.46 | (9.31%) |
| Eli Lilly | $34.48 | 29 | $37.28 | $1,081.12 | 8.12% |
| Bristol-Myers Squibb | $25.37 | 39 | $28.89 | $1,126.71 | 13.87% |
| Cash | 110.49 | 110.49 | 0% | ||
| Dividends Receivable | 125.05 | 125.05 | 0% | ||
| Total Portfolio | $10,550.48 | 5.50% | |||
| Investment In SPY | 1.04% | ||||
| Return vs SPY | 4.46% |
Source: Capital IQ, a division of Standards & Poor's. Data as of July 11.
Over the past month, the S&P fell 1.6%. As the market fell, remarkably our portfolio outperformance remained unchanged at 4.46%. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's only been 21 weeks. I firmly believe the results will bear us out.
Movers and shakers
Of our stocks, the biggest mover in the portfolio the past week was France Telecom, which fell 8.3%. The stock fell along with European banks after fresh fears arose over the debt crisis in Europe.
Money!
There are four upcoming dividends for the portfolio:
- Annaly Capital Management will pay a dividend of $0.65 on July 28. The ex-dividend date was June 28.
- Bristol-Myers Squibb will pay a dividend of $0.33 on Aug. 1. The ex-dividend date was June 29.
- Vodafone will pay a dividend of GBP 0.605 on Aug. 5. The ex-dividend date was June 1.
- National Grid will pay a dividend of $1.9005 on Aug. 17. The ex-dividend date was June 3.
Dividends and taxes
The portfolio collected dividends last week from France Telecom ($1.13/share), Philip Morris International ($0.64/share), and Altria ($0.38/share). If you are following along with your own account, you may have wondered why the France Telecom dividend was less than $1.13 per share. Unlike the U.K., where National Grid and Vodafone are based, France has a withholding tax on dividends of 15%, meaning that although you receive the full dividend, your broker automatically withholds 15% and pays it to France. It's not as bad as it sounds, as my colleague Dan Caplinger has explained:
The good news is that in many cases, you can get all or part of your money back. Under U.S. tax law, taxpayers are entitled to a foreign tax credit for taxes they pay on their overseas income. The form that many taxpayers are required to file to claim a foreign tax credit is extremely complicated. But if you haven't had much foreign tax withheld -- less than $300 for single taxpayers or $600 for joint filers -- then you can often claim a credit without filing the long form.
A further complication, though, is that you're not allowed to claim a foreign tax credit for taxes withheld on stocks held in IRAs. Although some countries have special provisions in their tax treaties that eliminate withholding taxes for stocks held in tax-favored accounts, many do not. As a result, you may end up paying foreign tax on IRA income even while it's tax-deferred for U.S. tax purposes.
My Foolish bottom line
I'm highly confident in this portfolio's ability to crush the market over the next decade, and that's why I put $10,000 of my personal cash into these stocks. My strategy is simple. I'm buying strong companies with outsized dividends, reinvesting those dividends, and holding them for the long run. Over the coming year, I'll track my performance, update you on when I'm going to reinvest all my dividends, and keep you abreast of news affecting these companies.
Consider the 10 tickers above along with the 13 names from a free report from Motley Fool's expert analysts called "13 High-Yielding Stocks to Buy Today," including one named by a senior retail analyst as "the dividend play of a lifetime." Tens of thousands have requested access to this report, and today I invite you to download it at no cost to you. To get instant access to the names of these 13 high yielders, simply click here -- it's free.
