Tracking a Dividend Portfolio
Board: Berkshire Hathaway
In July 2009 I suggested a dividend portfolio with an initial yield of 4.00%. http://boards.fool.com/ot-so-you-want-a-dividend-v2-27798752... I check from time to time to see how it has done.
The only changes in it have been forced: BNSF was bought out by some geezer, so the money was allocated among the remaining firms in proportion to their original weights. Two companies have had spin-offs lately, COP and KFT, so the spinoffs have been kept as well.
This has been running for 4.4 years now. The dividend payout has risen at a rate of 14.0%/year and is now 6.87% on the original portfolio value. However the prices have gone up a lot, so the yield is now only 2.95% on the current value. Only two positions still have yields over 4%, Santander and GlaxoSmithKline.
Had you reinvested all dividends in the stocks in question, the portfolio would now be worth 2.33 times as much as when it started. That's a rise of 21.22%/year compounded, just 1.05%/year ahead of the S&P including reinvested dividends.
There are 22 stocks at present. Two stocks are still losers in price terms: Santander -21% and Posco -4%. Both of those are profitable once you count their dividends. On the other hand two stocks are up about 150% (GE and NSC) and two stocks over 250% (IR and AXP). I think Posco is the only one whose dividend is now lower. Two others are flat, the rest are up. No doubt there are some modest flaws in my math. This stuff is fiendishly hard to track properly.