Sunday, May 12, 2013

Update of 2011 and 2012 Dividend Stocks - list




TheMoneyMadam’s 2011 and 2012 Dividend Machine portfolio performances are provided in the tables below.  These two portfolios provide valuable data for income investors.   



2011 DIVIDEND MACHINES PORTFOLIO – 52 Stocks


After the stock market meltdown in 2008/2009, the market was just beginning to get legs when I retired and then started my 2011 dividend machine project.  Stock prices are up significantly since then, so I am not surprised that the stocks purchased in the 2011 portfolio gained over thirty percent. Amount invested: $207,336 value as of last Friday $271,239.  


I wanted to make sure this dividend portfolio provided more income than a 10 yr. US Treasury and I am happy to report we beat that by a large margin:  2% versus 4.28%. This portfolio provides annual income of $8,875.   


See the table below to review the 2011 dividend machine portfolio status as of 5/10/2013 then look at the 2012 portfolio.



2011 DIVIDEND MACHINES Bought 100 Shares






Basis

 $  207,336

Current Dividend Income
 $  8,875





Value

 $  271,239

Yield on Basis
4.28%





$ Gain

 $    63,903

Yield on Current Value
3.27%





% Gain

30.82%



















Stock Prices Updated 5/10/2013
Stock Quotes Provided by MSN Money








2012 DIVIDEND MACHINES PORTFOLIO – 48 Stocks


In 2012, stock prices had grown more than legs.  Stock price increases make your new investments costs more.  Moreover, every one of us is searching for income so it is not surprising that dividend stock prices increased.  Demand for income stimulates increased cost of income.


In spite of the increased cost of these stocks, the 2012 dividend machine portfolio is worth more than the basis by 18%.  Amount invested: $208,821 value as of last Friday 5/10/2013 $246,641.



Like the 2011 portfolio, income beats the 10 yr. US Treasury by a lot (1.75% versus 3.88%) but you can see that the increased cost basis has cut into our income.  This portfolio provides annual income of $8,110 per year.


See the table below to review the details.


2012 DIVIDEND MACHINES  Bought 100 shares






Basis

 $  208,821

Current Dividend Income
 $  8,110





Value

 $  246,641

Yield on Basis
3.88%





$ Gain

 $    37,820

Yield on Current Value
3.29%





% Gain

18%



















Stock Prices Updated 5/10/2013
Stock Quotes Provided by MSN Money






CURRENT INCOME INVESTING


Cost of income is going up.  In 2013 every company that provides income costs more.   You have few alternatives.   Periodically bonds rattle their sabre but right now even junk bonds are expensive. 



What should you do?   I no longer have to manage anybody’s money but my own and this is not advice.   I can only tell you what I do and that is to continue to invest in well selected companies.  



Every company still has to meet my minimal four criteria.  (To review: those criteria are a dividend yield of 3% or more, dividend increases every year since at least 2007, earnings greater than dividend and d/e ratio equal to 1 or less or equal to industry standard.)  However, I am investing in fewer companies and expecting closer to 3.5%.



I sell calls on the companies with enough volatility to create more income.   Selling calls in an up market means that my stocks get sold.  That capital gain provides the money for further investing.  When bonds are competitive, I will buy them, but not yet.  



The 2013 DIVIDEND MACHINE PORTFOLIO is developing; we will see how it fares.   There are no guarantees just good disciplined income investing.

TheMoneyMadam