In June, 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.
|Philip Morris International||$68.49||14.5429||3.7%||$1,224.95||23.0%|
|Plum Creek Timber||$38.42||26||4.3%||$1,025.44||2.7%|
|Brookfield Infrastructure Partners||$26.12||38.2825||4.7%||$1,134.69||13.5%|
Investment in SPY
Source: S&P Capital IQ.
Our total portfolio performance since inception is 7.6%, just a hair behind that of the dividend-adjusted S&P. We have four stocks outperforming the index, and seven of 10 in positive territory. Despite the mild underperformance, we're still achieving a much-larger yield than the S&P, which should help keep the portfolio afloat when the seas get rough.
As I discussed in last week's column, I've adjusted the calculation of the total portfolio performance to accurately reflect total returns including dividend reinvestment. The previous method calculated the returns on investment, penalizing any reinvestment of cash. Now, I'm simply calculating the total return from the original June investment of $9,986.58. We have $10,746.06 in the account in cash and stock, so it's just a simple math problem to find the 7.6% total return. I'll adjust the calculation in all future weeks to more accurately reflect our returns, but I wanted to explain it here first. I let me be clear that I'm not changing the measuring stick in midstream (to mix metaphors).
In its latest earnings report, we got some dubious news for Annaly Capital
I'm continuing to evaluate how this portfolio will develop following its June one-year anniversary, my minimum holding period. One area of debate is how to re-structure the portfolio, if at all. For example, do I add new stocks and/or go above 10 positions? Last week a few readers also suggested that I give myself one mulligan for a stock that goes bad or where the fundamentals seriously mar the investment thesis. (Thanks, Fools!) Should I add a little bit more money into the portfolio? I'm mulling these decisions and how best to proceed.
As for portfolio composition, I continue to like Philip Morris
Dividends and other announcements
We're through earnings seasons, and we have limited dividend news for the moment.
- Southern went ex-dividend on Feb. 2 and paid out a dividend of $0.4725 per share on Mar. 5.
- Exelon went ex-dividend on Feb. 13 and paid out $0.525 per share on Mar. 8.
- Brookfield Infrastructure went ex-dividend on Feb. 27 and pays out $0.375 per share on Mar. 30.
went ex-dividend on Mar. 9 and pays out $0.10 per share on Mar. 30. (NYSE: FTR)
All that, of course, means more money coming into our pockets.
It's fun to sit back and get paid, and with the market volatility, we might have a good chance to reinvest those dividends at good prices. Europe continues to be an absolute mess, and continued bad news will likely have stocks plunging again -- and if they do, I'll be inclined to pick more shares up.
Foolish bottom line
I've been a fan of big dividends for a while, and I think this portfolio will outperform the market over time through the power of dividends. As I promised in the original article, I'll be holding these stocks for at least a year and will continue to track the portfolio over the course of the year, including news on these companies.
If you like dividends, consider the 10 tickers above along with the 11 names from a brand-new report from Motley Fool's expert analysts, "Secure Your Future With 11 Rock-Solid Dividend Stocks." Today I invite you to download it at no cost to you. To get instant access to the names of these 11 high yielders, simply click here -- it's free.
Jim Royal, Ph.D., owns shares of the 10 portfolio stocks mentioned in the table. The Motley Fool owns shares of Annaly, Seaspan, Plum Creek, and Brookfield Infrastructure, and has created a covered strangle position in Plum Creek. Motley Fool newsletter serviceshave recommended buying shares of Exelon, Philip Morris, Annaly, Southern, National Grid, Vodafone, and Brookfield Infrastructure, as well as writing a covered strangle position in Exelon and a covered straddle position in Seaspan.
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