Forty-eight 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 | $28.50 | $1,140.00 | 14.64% |
| Philip Morris (NYSE: PM) | $61.83 | 17 | $74.02 | $1,258.34 | 18.79% |
| National Grid | $45.63 | 22 | $48.12 | $1,058.64 | 5.46% |
| Annaly Capital Management (NYSE: NLY) | $17.55 | 57 | $16.59 | $945.63 | (5.47%) |
| Frontier Communications | $8.71 | 149 | $4.89 | $728.61 | (43.86%) |
| Southern | $37.87 | 26 | $45.07 | $1,171.82 | 19.01% |
| France Telecom (NYSE: FTE) | $22.23 | 45 | $14.91 | $670.95 | (32.93%) |
| Vodafone Group (Nasdaq: VOD) | $28.69 | 38 | $27.65 | $1,050.70 | (3.62%) |
| Eli Lilly | $34.48 | 29 | $39.90 | $1,156.98 | 15.71% |
| Bristol-Myers Squibb (NYSE: BMY) | $25.37 | 39 | $32.72 | $1,276.20 | 28.98% |
| Cash | $128.06 | ||||
| Dividends Receivable | $32.49 | ||||
| Total Portfolio | $10,618.42 | 6.18% | |||
| Investment in SPY | 1.44% | ||||
| Return vs. SPY (percentage points) | +4.74 |
Source: S&P Capital IQ, as of Jan. 20.
Since my last report, the SPDR S&P 500 rose 1.5%. Our portfolio actually fell somewhat, with our outperformance moving from beating the market by 7.77 percentage points to a 4.74-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 11 months.
Movers and shakers
Our largest mover since last time was Bristol-Myers Squibb, which fell 5.75%. The market has responded negatively to Bristol-Myers Squibb's plan to purchase Inhibitex for $2.5 billion, a 163% premium to its closing price.
Money!
There are four upcoming dividends for the portfolio:
- Annaly Capital Management will pay a $0.57 per-share dividend on Jan. 26. The ex-dividend date was Dec. 26.
- Vodafone will pay a dividend of 0.705 pence (roughly $1.12, not included in Dividends Receivable, as exchange rate won't be determined until close of market today) per share on Feb. 3. The ex-dividend date was Nov. 16.
- Southern will pay a $0.4725 per-share dividend on March 6. The ex-dividend date is Feb. 2.
- Eli Lilly will pay a dividend of $0.49 per share on March 9. The ex-dividend date is Feb. 13.
Reinvestment
With the dividends from Annaly and Vodafone, by Feb. 3, we will have just over $200 in cash in our portfolio. As I said last week, personally, I'm partial to investing in Annaly, Vodafone, or France Telecom. With Philip Morris down from over $80 per share, I'd also consider the tobacco giant as well.
While Frontier looks cheap, we have already made two sizable purchases, and to add a third would be overallocating to one stock. Annaly had a good year in 2011, and with low rates expected to stay until 2013 or even 2014, its high dividend looks safe. Vodafone also had a good year, finally receiving its first dividend from its 45% ownership of Verizon Wireless. The company is using the money to buy back shares and pay out a special dividend, which we'll receive on Feb. 3. France Telecom has been beaten down due to its debt level and exposure to the European crisis. So, Fools, what should I buy?
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 outsize 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 companies above along with the 11 names from a brand-new free report from Motley Fool's expert analysts called "11 Rock-Solid Dividend Stocks." To get instant access to the names of these 11 stocks, click here -- it's free.
