So it’s time for the second quarter update for my Perfect Dividend Portfolio, which I began to put together back in December and completed in April. I must take a moment to brag a bit; my portfolio is doing exactly what I wanted, and I am totally happy.
In this article, I’ll talk about how my three favorite companies are doing: Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), Meredith Corporation (NYSE:MDP) Publishing, and Sunoco Logistics Partners L.P. (NYSE:SXL).
For more information about my portfolio selection strategy, please read
Portfolio status and future plans
All of the companies scored at least 18 points on my rating system when I chose them. I will re-calculate their score once per quarter. Anything that drops below a 16 will be considered for replacement.
I am also keeping a close eye on the current yield. I intend to reinvest dividends once per quarter, after all ten companies have paid out, and I will reinvest in each company in the order in which I chose it, unless the company no longer scores at least an 18.
My portfolio as a whole is currently yielding 3.8%, with which I am very happy considering my minimum criterion is 3.0%. I’d like to keep the yield on the entire portfolio between 3.5% and 4.0%.
Based on current share prices, the portfolio is up 6%, and it has paid out 1.7% in dividends.
Now, for a quick update on where the individual companies stand today:
My first selection was Abbott Laboratories (NYSE:ABT). Once the company split into two on January 3, I sold the Abbott shares (then yielding only 1.8%) and reinvested in AbbVie Inc (NYSE:ABBV) shares (then yielding 5.0%). AbbVie Inc (NYSE:ABBV) paid out its dividend on May 15. The company is currently trading at $42 per share, up 32% from where I bought it in December. AbbVie Inc (NYSE:ABBV)‘s rating is a mix of the Abbott Laboratories (NYSE:ABT) and AbbVie Inc (NYSE:ABBV) metrics, and it now scores a 20 on my scoring system.
While I acknowledge that AbbVie Inc (NYSE:ABBV) is a new company and separate from Abbott Laboratories (NYSE:ABT), I believe that the management team will attempt to continue the same dividend growth strategy that Abbott Laboratories (NYSE:ABT) has pursued. Should AbbVie Inc (NYSE:ABBV) prove to follow a different dividend growth strategy, I will assess and remove it from my portfolio when it becomes necessary.
was my second selection, and it paid a dividend on May 31. It is currently trading at $88, up 9% from where I purchased it. Partnerre Ltd (NYSE:PRE)’s dividend yield has dropped to 2.9%, and its score has dropped to 17, so I’m considering it for replacement next quarter.
paid a dividend on May 7. It is trading at $59, up 21%. Enterprise Products Partners L.P. (NYSE:EPD) has a 15-year history of raising dividends, and a 5-year DGR of 5.7%. The partnership has increased its dividend twice so far this year; its second quarter dividend was an increase of 7% over the same quarter last year. However, the dividend metrics have softened since I chose it; I am considering it for replacement.
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
continues to delight me. The company paid a dividend on May 6. It’s trading at $95, up 49%. Interestingly enough, Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)‘s robust share price growth was matched by a significant increase in its dividend (50%), so it is still yielding 3.3%, and it has improved to a 20 on my scoring system.
A blowout earnings report shows that management is definitely doing something right with this company. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) currently pays out a reasonable 38% of earnings, but an even lower 16% of free cash flow, which it actually increased by over 100% year-over-year. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
seems to be doing everything right, and they are rewarding their shareholders as they should.