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 | $39.71 | 25.0818 | 4.3% | $1,139.47 | 14.4% |
| Exelon | $41.36 | 28.818 | 3.6% | $971.17 | (18.5%) |
| National Grid | $48.90 | 20.3693 | 5.7% | $1,146.59 | 15.1% |
| Philip Morris International Inc. (NYSE:PM) | $68.49 | 14.5429 | 3.7% | $1,324.13 | 32.9% |
| Ryman Hospitality (NYSE:RHP) | $44.93 | 24.7 | 4.3% | $1,124.34 | 1.3% |
| Plum Creek Timber (NYSE:PCL) | $38.42 | 26 | 3.4% | $1,304.94 | 30.6% |
| Brookfield Infrastructure Partners | $26.12 | 38.2825 | 4.5% | $1,430.62 | 43.1% |
| Vodafone Group Plc (ADR) (NASDAQ:VOD) | $26.75 | 56.7566 | 5.6% | $1,580.10 | 4.1% |
| Seaspan | $15.24 | 95 | 6.6% | $1,886.70 | 30.4% |
| AT&T | $35.20 | 28.4 | 5.0% | $1,026.66 | 2.7% |
| Retail Opportunity Investments | $12.20 | 81.95 | 4.4% | $1,120.26 | 12.0% |
| Annaly (NYSE:NLY) Preferred C | $25.98 | 38.5 | 7.4% | $992.53 | (0.5%) |
| Cash | $231.79 | ||||
| Dividends Receivable | $59.74 | ||||
| Original Investment | $12,983.97 | ||||
| Total Portfolio | $15,339.03 | 18.1% | |||
| Investment in SPY (including dividends) | 18.4% | ||||
| Relative Performance (percentage points) | (0.3) |
Source: S&P Capital IQ.
The portfolio is up 18.1% since we began this experiment, a modest gain of 0.1% from last week. But we made a substantial gain on the S&P, moving from 2.2% points back to just 0.3. That’s an example of the kind of outperformance we expect in rough markets.
Fellow Fool John Maxfield had an intriguing take on Annaly Capital Management, Inc. (NYSE:NLY)‘s proposal to convert its management structure from internal to external. He sees that as a way for executives to move their very high salaries away from public scrutiny. As a holder of the preferred stock, I’m less concerned about this than a common-stock shareholder should be.
Two weeks ago, I traded this portfolio’s Annaly common for shares in Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), a very attractively placed REIT with a solid yield of more than 4%. It compares very favorably to lodging peers but its valuation doesn’t reflect it yet. Management is buying back $100 million in stock and will keep buying until the stock is valued near its peers. You can read more on this fascinating special situation here. I’m continuing to look for a favorable spread — at least $0.40 — between the Series C and Series D preferreds, and then I’ll switch my ownership position to the Series D.
