Update on the DRIP and Forget Portfolio
Submitted by Sizemore Investment Letter as part of our contributors program
Update on the DRIP and Forget Portfolio
One of my most popular portfolios in the Sizemore Investment Letter and Macro Trend Investor was the “DRIP and Forget” portfolio, also called the “Core Dividend Portfolio.” I’ve created a landing page here to track the portfolio’s continued progress, and I will periodically post updates in Sizemore Insights.
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I’ve also added a new column–“yield on cost”–which calculates what your effective dividend yield today would be based on the original price at which I recommended the stock. I realize that most people reading this today will not have purchased the stock at my original recommendation date. I’m ok with that. This is for illustrative purposes only. My goal here is merely to show you how a solid dividend portfolio can provide for your income needs in retirement.
The DRIP and Forget portoflio is a supplementary list of recommendations that I consider a substitute for fixed income. As with all investments in the stock market, it will have more short-term volatility than a fixed income portfolio, but taken as a group, I consider the investments in this list a viable substitute for retirement income. Unlike bond interest, their dividend payments can be expected to rise over time. The DRIP and Forget stocks are intended to be held long-term in a dividend reinvestment program (“DRIP”), hence the name “DRIP and Forget.”
Total returns are cumulative and include capital appreciation and dividends assuming the buy price and buy date shown.
*Last updated October 14, 2014
Company
|
Ticker
|
Buy Date
|
Buy Price
|
Current Price
|
Current Yield
|
Yield on Cost
|
Total Dividends Recieved
|
Total Return
|
---|---|---|---|---|---|---|---|---|
Abbott Laboratories | ABT | 11/5/2012 | 30.81 | 41.31 | 2.15% | 2.86% | $1.44 | 38.04% |
Colgate-Palmolive | CL | 11/8/2010 | 36.41 | 64.04 | 2.24% | 3.95% | $4.75 | 88.93% |
Diageo | DEO | 10/8/2010 | 70.8 | 109.92 | 3.75% | 4.88% | $11.76 | 68.81% |
Intel | INTC | 7/21/2010 | 21.26 | 31.89 | 2.86% | 4.23% | $3.54 | 66.65% |
Johnson & Johnson | JNJ | 7/7/2010 | 59.08 | 96.86 | 2.74% | 4.74% | $9.68 | 80.33% |
Kimberly-Clark | KMB | 8/6/2010 | 65.29 | 106.55 | 3.12% | 5.15% | $12.84 | 81.57% |
Altria Group | MO | 7/7/2010 | 20.54 | 46.13 | 4.52% | 10.13% | $7.36 | 157.89% |
Microsoft | MSFT | 7/7/2010 | 23.82 | 44.18 | 2.84% | 4.70% | $3.61 | 100.63% |
National Retail Properties | NNN | 7/8/2010 | 34.97 | 36.63 | 4.66% | 4.80% | $0.81 | 7.06% |
Nestle | NSRGY | 12/8/2010 | 56.06 | 70.93 | 3.39% | 4.32% | $8.62 | 4.19% |
Realty Income | O | 7/8/2013 | 42.65 | 43.34 | 5.15% | 5.15% | $2.55 | 6.75% |
Procter & Gamble | PG | 7/7/2010 | 59.34 | 83.3 | 3.09% | 4.34% | $9.49 | 56.37% |
Philip Morris International | PM | 4/8/2010 | 52.52 | 84.28 | 4.76% | 7.62% | $14.42 | 86.02% |
Unilever | UL | 12/8/2010 | 29.43 | 40.11 | 3.78% | 5.22% | $5.01 | 53.31% |
Wal-Mart | WMT | 6/7/2013 | 76.33 | 77.94 | 2.48% | 2.52% | $2.38 | 5.23% |
Note: These returns are presented for illustrative purposes only and do not correspond to a real-money portfolio. My objective here is to illustrate the power of rising dividends and the superiority of dividend-paying stocks over bonds as long-term income investments.
Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today’s best global value plays.
This article first appeared on Sizemore Insights as Update on the DRIP and Forget Portfolio