Thirty-three 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 (NYSE: MO) |
$24.86 |
40 |
$26.54 |
$1,061.60 |
6.76% |
|
Philip Morris International (NYSE: PM) |
$61.83 |
16 |
$62.80 |
$1,004.80 |
1.57% |
|
National Grid (NYSE: NGG) |
$45.63 |
22 |
$48.86 |
$1,074.92 |
7.08% |
|
Annaly Capital Management (NYSE: NLY) |
$17.55 |
57 |
$15.79 |
$900.03 |
(10.03%) |
|
Frontier Communications (NYSE: FTR) |
$8.95 |
137 |
$5.63 |
$771.31 |
(37.09%) |
|
Southern Co. (NYSE: SO) |
$37.87 |
26 |
$41.81 |
$1,087.06 |
10.40% |
|
France Telecom |
$22.23 |
45 |
$16.26 |
$731.70 |
(26.86%) |
|
Vodafone Group |
$28.69 |
38 |
$26.00 |
$988.00 |
(9.38%) |
|
Eli Lilly |
$34.48 |
29 |
$36.73 |
$1,065.17 |
6.53% |
|
Bristol-Myers Squibb |
$25.37 |
39 |
$32.09 |
$1,251.51 |
26.49% |
|
Cash |
87.13 |
$87.13 | |||
|
Dividends Receivable |
62.92 |
$62.92 | |||
|
Total Portfolio |
$10,086.15 |
0.86% | |||
|
Investment In SPY |
(13.54%) | ||||
|
Return vs SPY (percentage points) |
14.41 |
Source: Capital IQ, a division of Standard & Poor's, as of Oct. 4.
Since my last report, the SPDR S&P 500 (NYSE: SPY) fell 3.4%. As the market fell, our portfolio outperformance rose, moving from beating the market by 12.49 percentage points to a 14.41 point advantage. 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 eight months. 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 again Frontier Communications, which fell 12%. As I said last week, the market is worried about Frontier's large debt load, but that ignores the fact that large quantities of debt are not due until January 2013, and even those amounts are manageable. The firm's game-changing integration of Verizon's rural assets is going ahead of schedule, and I continue to believe the stock is undervalued.
Money!
There are four upcoming dividends for the portfolio:
- Altria will pay a dividend of $0.41 per share on Oct. 11. The ex-dividend date was Sept. 13.
- Philip Morris International will pay a dividend of $0.77 per share on Oct. 11. The ex-dividend date was Sept. 23.
- Annaly Capital Management will pay a dividend of $0.60 per share on Oct. 27. The ex-dividend date was Sept. 28.
- Bristol-Myers Squibb will pay a dividend of $0.33 per share on Nov. 1. The ex-dividend date is Oct. 6.
Commentary
Our cash level has built up to the point where I'd like to reinvest our cash. As I've said before, I believe Frontier is very undervalued below $6. As such, I plan on reinvesting our cash tomorrow in 12 more shares of Frontier. Ordinarily, you would be right to be worried about overallocating to Frontier. However, the current risk/reward ratio is too good to pass up.
With more cash coming in, at the end of the month I plan on reinvesting in my other favorite from a risk/return perspective, Philip Morris. At today's price, we can buy a share at the same level it traded at when we first invested eight months ago, but the difference now is that the per-share dividend has risen from $0.64 to $0.77 per quarter. Philip Morris is one of the strongest companies in the world, earning the monikers "disaster-proof" and "unbeatable" from me. It is the stock I'd like to anchor the portfolio, and as such, I'll be buying a share at the end of the month once our cash is replenished.
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.
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