The World’s Best Dividend Portfolio: The Southern Company (SO), Annaly Capital Management, Inc. (NLY) and More

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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. 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
Southern (NYSE:SO) $39.71 25.0818 4.4% $1,109.37 11.4%
Exelon (NYSE:EXC) $41.36 28.818 6.7% $906.04 (24%)
National Grid (NYSE:NGG) $48.90 20.3693 5.7% $1,118.68 12.3%
Philip Morris International (NYSE:PM) $68.49 14.5429 3.9% $1,282.10 28.7%
Annaly Capital (NYSE:NLY) $17.79 72.5 12% $1,078.08 (16.4%)
Frontier Communications
(NASDAQ:FTR)
$7.88 126.4243 8.9% $577.76 (42%)
Plum Creek Timber (NYSE:PCL) $38.42 26 3.5% $1,252.68 25.4%
Brookfield Infrastructure Partners  (NYSE:BIP) $26.12 38.2825 4% $1,429.47 43%
Vodafone (NASDAQ:VOD) $26.52 37.5566 6% $1,026.05 3%
Seaspan (NYSE:SSW) $15.24 95 5.4% $1,780.30 23%
AT&T Inc. (NYSE:T) $35.20 28.4 5.2% $988.04 (1.2%)
Retail Opportunity Investments(NASDAQ:ROIC) $12.20 81.95 4.3% $1,069.45 7%
Annaly Preferred C $25.98 38.5 7.6% $972.13 (2.8%)
Cash $159.27
Dividends Receivable $31.78
Original Investment $12,983.97
Total Portfolio $14,781.18 13.8%
Investment in SPY(including dividends) 14.8%
Relative Performance(percentage points) (1.0)

Source: S&P Capital IQ.

The portfolio is up 13.8%, up a very solid 0.9 percentage points from last week. The S&P went up, too, but not quite as much, so we moved up relatively, from 1.7 percentage points back to 1.0. In a couple of weeks, we’ll have the next wave of dividends rolling into the portfolio, which should help us do well.

The Southern Company (NYSE:SO)

The portfolio is now yielding 5.7% — about three times the S&P – and we have nearly $160 in cash in the account and about $32 more on the way within the month. With more than $100 in cash, that means it’s time to reinvest. I’ll continue to ponder where those funds should go.

Annaly announced that it was buying the nearly 88% of Crexus Investment Corp (NYSE:CXS) that it doesn’t own for $13 per share, or $872 million in total. The purchase marks Annaly’s push to invest directly in commercial real estate, and is part of the company’s broader move away from its traditional stronghold in agency-backed mortgages. Those mortgages are considered safe assets because they’re backed by the U.S. government, but the narrowing interest rate spread there has hurt Annaly’s profitability.

National Grid came out with a “positive outlook” for its business with expectations of “good operating and financial performance.” Unfortunately, the company provided no direction on how much its dividend might grow, and none should be forthcoming until the company’s full-year financials are revealed in May. Where the dividend goes depends on how negotiations with its regulator proceed, as fellow Fool Maynard Paton explains in this article.

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