SUNDAY, MARCH 6, 2011
10 Sustainable High Yield Dividend Champions
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I have written updates the past 3 months on a screen I call "High Yield Stocks with Staying Power". The screen is tracked publicly as a continuous hypothetical portfolio with a starting balance of $100,000 on Scott's Investments (see the right hand column for a portfolio titled "High Yield Stocks with Staying Power").
Like many of the screens, strategies, and portfolios I track and prefer, this strategy takes a small number of historically relevant ideas, to create a simple, yet powerful action plan for the individual investor. As I have previously detailed, "Some studies have shown that the, highest yielding, low payout stocks perform better over time than stocks with higher payouts and lower yields." This portfolio attempts to capture the best high yield, low payout stocks with a history of raising dividends.
Each month I start with the Dividend Champions list as compiled by DRIP Investing. The list is comprised of stocks which have increased their dividend payout for at least 25 consecutive years. I then take the top third of Dividend Champions based on yield and sort the results based on the top third with the lowest payout ratio. This month's Dividend Champions list has 99 stocks, so the top 33 yielding stocks was my starting point. I then ranked the remaining 33 based on payout ratio and take the top 10 stocks. These stocks will comprise the month portfolio.
The goal is to weigh the odds in our favor that we will be investing in stocks which have historically paid and raised dividends. In addition, we want stocks with a high yield in order to increase income received.
I began tracking the portfolio in December and to date it is up 5.71% including dividends. For Monday, March 6th, the portfolio will sell Clorox (CLX) and Cincinnati Financial (CINF) and buy Questar (STR) and Genuine Parts (GPC). In order to limit turnover, stocks on the previous months list which are no longer in the top third based on yield due to price appreciation (but not dividend cuts) but which still have a qualifying low payout ratio will remain in the portfolio. This month that applied to McDonalds (MCD).
This month's current portfolio effective Monday, is below. Last month's list can be seen here:
No positions, data courtesy of Finviz. Portfolio will be updated monthly on around the 5th of the month. Strategy modifications may be made in the future to limit turnover.
I have written updates the past 3 months on a screen I call "High Yield Stocks with Staying Power". The screen is tracked publicly as a continuous hypothetical portfolio with a starting balance of $100,000 on Scott's Investments (see the right hand column for a portfolio titled "High Yield Stocks with Staying Power").
Like many of the screens, strategies, and portfolios I track and prefer, this strategy takes a small number of historically relevant ideas, to create a simple, yet powerful action plan for the individual investor. As I have previously detailed, "Some studies have shown that the, highest yielding, low payout stocks perform better over time than stocks with higher payouts and lower yields." This portfolio attempts to capture the best high yield, low payout stocks with a history of raising dividends.
Each month I start with the Dividend Champions list as compiled by DRIP Investing. The list is comprised of stocks which have increased their dividend payout for at least 25 consecutive years. I then take the top third of Dividend Champions based on yield and sort the results based on the top third with the lowest payout ratio. This month's Dividend Champions list has 99 stocks, so the top 33 yielding stocks was my starting point. I then ranked the remaining 33 based on payout ratio and take the top 10 stocks. These stocks will comprise the month portfolio.
The goal is to weigh the odds in our favor that we will be investing in stocks which have historically paid and raised dividends. In addition, we want stocks with a high yield in order to increase income received.
I began tracking the portfolio in December and to date it is up 5.71% including dividends. For Monday, March 6th, the portfolio will sell Clorox (CLX) and Cincinnati Financial (CINF) and buy Questar (STR) and Genuine Parts (GPC). In order to limit turnover, stocks on the previous months list which are no longer in the top third based on yield due to price appreciation (but not dividend cuts) but which still have a qualifying low payout ratio will remain in the portfolio. This month that applied to McDonalds (MCD).
This month's current portfolio effective Monday, is below. Last month's list can be seen here:
No positions, data courtesy of Finviz. Portfolio will be updated monthly on around the 5th of the month. Strategy modifications may be made in the future to limit turnover.
| Ticker | Company | Covered Call Analysis | Dividend Yield | Payout Ratio |
| UVV | Universal Corp. | Here | 4.58% | 31.93% |
| JNJ | Johnson & Johnson | Here | 3.54% | 43.50% |
| MCD | McDonald's Corp. | Here | 3.21% | 48.68% |
| STR | Questar Corporation | Here | 3.50% | 49.34% |
| SYY | Sysco Corp. | Here | 3.77% | 51.86% |
| T | AT&T, Inc. | Here | 6.16% | 52.33% |
| GPC | Genuine Parts Company | Here | 3.41% | 55.77% |
| PNY | Piedmont Natural Gas Co. Inc. | Here | 3.72% | 56.38% |
| ABT | Abbott Laboratories | Here | 3.94% | 58.78% |
| KMB | Kimberly-Clark Corporation | Here | 4.32% | 58.87% |
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