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, and then more again in 2013. 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.
|
Company |
Cost Basis |
Shares |
Yield |
Total Value |
Return |
|---|---|---|---|---|---|
|
Exelon |
$41.36 |
28.818 |
3.9% |
$912.09 |
(23.5%) |
|
National Grid (NGG 1.62%) |
$48.90 |
20.3693 |
5.5% |
$1,194.46 |
19.9% |
|
Philip Morris International |
$78.05 |
25.5429 |
3.8% |
$2,270.25 |
13.9% |
|
Ryman Hospitality |
$40.96 |
39.3 |
5.3% |
$1,482.00 |
(7.9%) |
|
Plum Creek Timber |
$38.42 |
26 |
3.6% |
$1,276.86 |
27.8% |
|
Brookfield Infrastructure Partners |
$26.12 |
38.2825 |
4.6% |
$1,417.22 |
41.7% |
|
Vodafone (VOD 1.10%) |
$27.26 |
74 |
5.5% |
$2,207.42 |
9.4% |
|
Seaspan |
$15.24 |
95 |
6.2% |
$2,009.25 |
38.8% |
|
Retail Opportunity Investments |
$12.20 |
81.95 |
4.2% |
$1,157.13 |
15.7% |
|
Annaly Preferred D (NLY 2.02%) |
$25.50 |
38.9 |
7.8% |
$939.44 |
(5.3%) |
|
Gramercy Property Trust |
$4.48 |
223 |
0% |
$1,065.94 |
6.7% |
|
Sprott Resource |
$3.51 |
285 |
11.4% |
$1,023.15 |
2.3% |
|
Cash |
$586.12 |
||||
|
Dividends Receivable |
$130.35 |
||||
|
Original Investment |
$14,983.36 |
||||
|
Total Portfolio |
$17,671.68 |
17.9% |
|||
|
Investment in SPY (including dividends) |
26.1% |
||||
|
Relative Performance (percentage points) |
(8.2) |
Source: Capital IQ, a division of Standard & Poor's.
The total portfolio is now up 17.9%. We now lag the index by 8.2 points. The blended yield fell to 5.1%.
If dividend stocks remain at these levels for a while, I'll be tempted to deploy some of the nearly $600 in accumulated dividends, and there's still over $100 in accrued payouts. All that will be reinvested in what I think is the best idea in the portfolio. In addition, next month is a big month for payouts, with five companies going ex-dividend. It's always fun to watch those dividends roll in.
A couple of recent rate hikes for utility National Grid should help the company continue with its current dividend and boost it further over the next few years. The company's Niagara Mohawk unit won a rate increase that should boost electric revenue $123 million and gas revenue $9 million in the next three years. This Fool blog article has more details.
Mortgage REITs have been an investor favorite for the last few years, but this quarter could prove volatile for many, including Annaly Capital, as interest rates rise. Indeed, Annaly has seen a declining interest rate spread for some time. Here's what Fools Matt Koppenheffer and David Hanson have to say about the sector and what you should watch out for: Check out the video here.
Vodafone expressed its interest again in selling off its 45% stake in Verizon Wireless to joint-venture partner Verizon (VZ 3.34%). This is not so much new news as it is a reiteration that Vodafone is interested in dealing. I suspect it's also a public means of putting the ball back in Verizon's court and ensuring that shareholders of both companies know that it's not Vodafone's obstinance but rather Verizon's hardball tactics that are preventing a deal from getting done. Verizon Wireless is the key unit of Verizon's operations, and every quarter that goes by, Wireless becomes more valuable and more critical to Verizon's success. How long until Verizon pays up?
The low implied valuation on Vodafone's 45% stake in Verizon Wireless encouraged me to pick up call options in my Special Situations portfolio. If Verizon buys out Vodafone, as I think will happen, those calls could rapidly appreciate.
And some continue to speculate that AT&T may tag-team with Verizon for a complete buyout of Vodafone. That speculation suggests AT&T would get Vodafone's international operations.
Dividends and earnings announcements
Here is the recent news:
Dividend news:
- Ryman went ex-dividend on June 26 and paid out $0.50 per share on July 14.
- Philip Morris went ex-dividend on June 25 and paid out $0.85 per share on July 11.
- Sprott went ex-dividend on July 26 and pays out $0.035 per share on August 15.
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 continue to track and report on the portfolio's progress, including news on these companies.
