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The World's Best Dividend Portfolio

Saturday - 1/19/2013, 3:00pm  ET

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

4.6%

$1,078.52

8.3%

Exelon

$41.36

28.818

7.1%

$866.27

(27.3%)

National Grid

$48.90

20.3693

5.7%

$1,115.63

12%

Philip Morris International

$68.49

14.5429

3.8%

$1,296.35

30.2%

Annaly Capital

$17.79

72.5

12.2%

$1,067.93

(17.2%)

Frontier Communications

$7.88

126.4243

9.2%

$556.27

(44.2%)

Plum Creek Timber

$38.42

26

3.6%

$1,223.04

22.4%

Brookfield Infrastructure Partners

$26.12

38.2825

4.2%

$1,375.11

37.5%

Vodafone

$26.52

37.5566

6%

$965.58

(3.1%)

Seaspan

$15.24

95

5.7%

$1,690.05

16.8%

AT&T

$35.20

28.4

5.3%

$942.88

(5.7%)

Retail Opportunity Investments

$12.20

81.95

4.3%

$1,077.64

7.8%

Annaly Preferred C

$25.98

38.5

7.6%

$972.13

(2.8%)

Cash

     

$68.52

 

Dividends Receivable

     

$110.24

 

Original Investment

     

$12,983.97

 

Total Portfolio

     

$14,406.15

11%

Investment in SPY
(Including Dividends)

       

13.5%

Relative Performance (Percentage Points)

       

(2.5)

Source: Capital IQ, a division of Standard & Poor's.

The portfolio is up 11%, down 0.3 percentage points from last week. The S&P, however, went up, and so we moved down relatively, from 1.5 percentage points back to 2.5. Now that the government has worked out the dividend tax issue, let's hope that dividend stocks can return to their former glory. Since the election, the S&P has had all the fun, but I'd like to be ahead.

The portfolio is now yielding 5.8% -- about three times the S&P -- and we have nearly $70 in cash in the account and about $110 more on the way within two weeks.

What's going to happen to the dividend of National Grid, one of the largest in the portfolio? The company already offers around a 6% yield, but U.K. regulators may not be so generous when the company signs its next set of contracts, which will run from this April 1 to March 31, 2021. And that could determine what type of dividend increases investors could see in future years. Fellow Fool Roland Head says to expect something less heady than the 8% that investors have gotten used to recently -- maybe something around half of that. You can read the rest of his analysis here.

Plum Creek agreed to a deal that sees the timber company acquire a 25-year royalty interest in crushed stone quarries in South Carolina. The deal seems a bit unusual, but let's see where it goes. I continue to like Plum Creek for its exposure to the rebounding U.S. housing market, and shares could see a substantial increase in coming years if housing normalizes.

Speaking of somewhat unusual tie-ups, Frontier announced this week that it's offering natural gas and electricity in Ohio through FTR Energy Services. In addition, FTR will offer 100% green energy to consumers where available. Fellow Fool Dan Caplinger looked at Frontier's leadership, namely CEO Maggie Wilderotter, and found one area particularly lacking -- her alignment with shareholders. You can read his full analysis here.

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