The World's Best Dividend Portfolio
Aug 12th 2011 10:31AM
Updated Aug 12th 2011 10:32AM
In June, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offered 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.
|Southern (NYS: SO)||$39.71||25.0818||$39.41||$988.47||(0.8%)|
|Exelon (NYS: EXC)||$41.82||23.818||$41.08||$978.44||(1.8%)|
|National Grid (NYS: NGG)||$48.90||20.3693||$47.27||$962.86||(3.3%)|
|Philip Morris International (NYS: PM)||$68.49||14.5429||$65.55||$953.29||(4.3%)|
|Annaly Capital (NYS: NLY)||$18.24||55||$17.83||$980.65||(2.2%)|
|Frontier Communications (NYS: FTR)||$7.88||126.4243||$7.04||$890.03||(10.7%)|
|Plum Creek Timber (NYS: PCL)||$38.42||26||$36.98||$961.48||(3.7%)|
|Brookfield Infrastructure Partners (NYS: BIP)||$26.12||38.2825||$25.17||$963.57||(3.6%)|
|Vodafone (NAS: VOD)||$26.52||37.5566||$26.45||$993.37||(0.3%)|
|Seaspan (NYS: SSW)||$14.61||69||$13.03||$899.07||(10.8%)|
|Investment in SPY||(9.2%)|
|Relative Performance (percentage points)||+6.0|
Source: Capital IQ, a division of Standard & Poor's.
The portfolio is now outperforming the S&P 500 by 6 percentage points in its first few weeks, but not the way I'd rather see it, with the portfolio's -3.2% return beating the market's even-worse performance. In the midst of the market turmoil, the portfolio actually increased its outperformance from last week.
I'm not particularly concerned about short-term fluctuations, though. This dividend portfolio is designed to do better when the market is performing poorly. In the meantime, we'll cash our dividend checks and wait for an opportunity to reinvest those proceeds. Both Seaspan and Frontier have taken the market downturn hard and could be attractive places to add reinvested dividends.
Dividends and earnings announcements
We're moving out of earnings season and into dividend season, and we have a couple bits of news:
- Southern Co. went ex-dividend on July 28 and will pay out its dividend of $0.4725 per share on Sept. 6.
- Exelon went ex-dividend yesterday and will pay $0.525 per share on Sept. 9.
- Plum Creek went ex-dividend today and will pay out a dividend of $0.42 per share on Aug. 31.
- Seaspan went ex-dividend yesterday and will pay out $0.1875 per share on Aug. 22.
We'll be watching out for dividends and other news items in the next weeks. Several stocks are set to go ex-dividend in the next few weeks. With the market volatility, we might have a good chance to reinvest those dividends at good prices.
Things look on track for Annaly and other peers in the mortgage REIT sector to continue their winning ways. The Federal Reserve announced that it would maintain low interest rates until at least the middle of 2013, helping Annaly and others maintain their low cost of funding. You can read more on why I think Annaly is a great place to be now by clicking here. And for a rundown of the company's latest quarter, click here.
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 13 names from a free report from Motley Fool's expert analysts called "13 High-Yielding Stocks to Buy Today." Hundreds 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.
At the time this article was published Jim Royal, Ph.D., owns shares of every company mentioned here. The Motley Fool owns shares of Seaspan, Philip Morris, Annaly, and Brookfield Infrastructure. The Fool owns shares of and has written puts on Plum Creek. Motley Fool newsletter services have recommended buying shares of Brookfield Infrastructure, Southern, Philip Morris, National Grid, Exelon, and Vodafone; writing a covered straddle position on Seaspan; and creating a covered strangle position in Exelon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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