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Dividends4Life (30.33)

Dividend Securities For A Well-Rounded Asset Allocation



February 19, 2010 – Comments (1) | RELATED TICKERS: ABT , MCD , MMM

I am a firm believer that asset allocation plays a significant part in a portfolio’s long-term results. Recently, I received a question asking if you could have a diversified portfolio of dividend stocks. It is an interesting question that deserves further examination.

As for my portfolio, I consider asset allocation only when looking at my holdings in total. It would be much too difficult to maintain a good allocation within individual portfolios (income, growth, 401(k), Roth IRA, etc.), while trying to maintain my overall allocation. However, an investor could build a degree of allocation into a portfolio of dividend income securities. Consider the following:

Business Services

Sector Automatic Data Processing Inc. (ADP)
Yield: 3.33% | Style: Large Growth | Analysis

C H Robinson Worldwide Inc. (CHRW)
Yield: 1.86% | Style: Large Growth

Expeditors International of Washington Inc. (EXPD)
Yield: 1.16% | Style: Mid Growth

Consumer Goods Sector

Clorox Company (CLX)
Yield: 3.23% | Style: Mid Core

Coca-Cola Company (KO)
Yield: 3.04% | Style: Large Growth | Analysis

Procter & Gamble Company (PG)
Yield: 2.85% | Style: Large Core | Analysis

Consumer Services Sector

Genuine Parts Company (GPC)
Yield: 4.19% | Style: Mid Value | Analysis

Sysco Corporation (SYY)
Yield: 3.56% | Style: Large Core | Analysis

McDonald’s Corporation (MCD)
Yield: 3.22% | Style: Large Core | Analysis

Energy Sector

Yield: 6.15% | Style: Large Value

Chevron Corporation (CVX)
Yield: 3.75% | Style: Large Value

ExxonMobil Corporation (XOM)
Yield: 2.56% | Style: Large Value

Financial Services Sector

Harleysville Group Inc. (HGIC)
Yield: 3.90% | Style: Small Value | Analysis

Chubb Corporation (CB)
Yield: 2.85% | Style: Large Value | Analysis

Aflac Inc. (AFL)
Yield: 2.38% | Style: Large Core | Analysis

Hardware Sector

Diebold Incorporated (DBD)
Yield: 3.67% | Style: Small Value

Linear Technology (LLTC)
Yield: 3.23% | Style: Mid Core

Raven Industries Inc. (RAVN)
Yield: 1.90% | Style: Small Growth | Analysis

Health Care Sector

Meridian Bioscience Inc. (VIVO)
Yield: 3.27% | Style: Small Growth

Johnson & Johnson (JNJ)
Yield: 3.08% | Style: Large Core | Analysis

Cardinal Health Inc. (CAH)
Yield: 2.10% | Style: Large Core | Analysis

Industrial Materials Sector

Nucor Corp. (NUE)
Yield: 3.40% | Style: Large Core | Analysis

Emerson Electric Co. (EMR)
Yield: 2.90% | Style: Large Core | Analysis

3M Company (MMM)
Yield: 2.58% | Style: Large

Core Media Sector

McGraw-Hill Companies Inc. (MHP)
Yield: 2.63% | Style: Large Core

Pharmaceuticals Sector

Eli Lilly & Company (LLY)
Yield: 5.77% | Style: Large Value

Abbott Laboratories (ABT)
Yield: 2.97% | Style: Large Growth | Analysis

Real Estate Sector

Essex Property Trust (ESS)
Yield: 5.14% | Style: Mid Core

Corporate Office Properties Trust Inc. (OFC)
Yield: 4.29% | Style: Mid Core

Federal Realty Investment Trust (FRT)
Yield: 4.06% | Style: Mid Core

Telecommunications Sector

CenturyLink Inc. (CTL)
Yield: 8.10% | Style: Large Value

AT&T Inc. (T)
Yield: 6.54% | Style: Large Value | Analysis

Utilities Sector

Integrys Energy Group Inc. (TEG)
Yield: 6.61% | Style: Mid Value

Consolidated Edison Company (ED)
Yield: 5.59% | Style: Large Value

MGE Energy Inc. (MGEE)
Yield: 4.45% | Style: Small Core


Vanguard Short-Term Bond ETF (BSV)
Yield: 2.74% | Style: Short-Term Bond

Vanguard Intermediate-Term Bond ETF (BIV)
Yield: 4.32% | Style: Intermediate-Term Bond

Vanguard Long-Term Bond ETF (BLV)
Yield: 5.16% | Style: Long-Term Bond

Needless to say, the above will not provide a perfect allocation, but it goes a long way to provide diversity in a portfolio focused only on income securities. In my personal portfolio, I buy the best available dividend securities and use my other investments to balance my asset allocation.

Full Disclosure: Long ABT, ADP, AFL, BIV, BLV, BP, CLX, CTL, CVX, ED, EMR, GPC, HGIC, JNJ, KO, LLY, MCD, MMM, NUE, PG, SYY, T, TEG. See a list of all my income holdings here.

1 Comments – Post Your Own

#1) On February 19, 2010 at 2:10 PM, EnigmaDude (55.08) wrote:

Wow - fantastic list to start from!  Thanks for putting this together.

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