High Yield Dividend Champion Portfolio – March Update
Scott's Investments | Mar 06, 2013 02:04AM ET
In December 2010, I created a screen/hypothetical portfolio called the “High Yield Dividend Champion Portfolio.” The screen is tracked publicly as a continuous hypothetical portfolio with a starting balance of $100,000 on In January I announced some changes to the ranking system. The changes were not due to poor performance – the strategy has returned over 50% in the past two-plus years:
We still begin with the Dividend Champion list. The list is first sorted by yield and the lowest 50% yielding stocks are eliminated.
The remaining stocks are then assigned a rank based on their yield (the higher the yield the higher the rank), payout ratio (the lower the payout ratio the higher the rank), 3 year dividend growth rate, and 5/10 year Dividend Acceleration/Deceleration (5-year average increase divided by 10-year average increase). Extra weight is given to yield and payout ratio rankings.
The top 10 stocks based on the new ranking system make the portfolio. Stocks will be sold at the re-balance date (generally around the 5th of the month) when they drop out of the top 15 (to limit turnover) and are replaced with the next highest rated stock.
This month there are two new positions. 1st Source (SRCE) was sold for a one month gain of 2.92% and a purchase date of 2/5/2013. Diebold (DBD) was sold for a loss of 13.92% (excluding dividends) with an original purchase date of 8/3/12.
Proceeds from the sale were used to purchase 395 shares of Altria Group (MO) and 371 shares of UGI Corp (UGI).
The top 17 stocks based on the new ranking methodology are below and displayed in order of their ranking:
The current portfolio is below:
All returns exclude commissions and taxes and are hypothetical. Real results will differ.
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