Last year I did some in-depth research to find long term sustainable dividend stocks and have been doing updates on this Ultimate Sustainable dividend portfolio since then in the attempt to show how well such a portfolio can perform over the long term but also show how I would manage such a portfolio. I have said it before, I do not believe in stocks that you can hold “forever”. Thus, even in a long term portfolio such as this one, I will end up making some trades from time to time. I did do one last month so nothing new is coming in April. I do discuss the search for new high quality sustainable dividend stocks that can be added in our free mailing list, if ever you would like to receive those types of updates, please join, it’s free:

Keep in mind that this portfolio was built by selecting 20 stocks out of thousands. The goal is not to pick the 20 best dividend stocks but rather to pick a diversified, high quality portfolio that will keep dividends increasing over time.

Here are the holdings as of last night to start off (please note that currently, dividends are not reinvested automatically through a DRIP strategy):

Dividends Received

Not much change here, March is done, April will be a slower month as was the case in January!:

Ultimate Sustainable Dividend Portfolio News

Returns

A few bad performances ended up meaning that the USDP is slightly under-performing the S&P500.. hopefully not for long

Trades

After adding Aflac (AFL) in last month’s update, I do expect to keep more or less the same stocks for a while now. We’ll see how things go:)

Wow… yesterday was a brutal day. In last week’s tech stock newsletter, I wrote about the perils of shorting certain stocks. I certainly did not expect AOL (AOL) to be part of that group. But after announcing a surprise sale of patents to Microsoft (MSFT) for $1B or so, the stock shot up nearly 50%… killer. Thankfully, another one of my short positions, Pandora (P) moved down as well (no significant news).  The end conclusion is that the long Apple (AAPL) and short AOL (AOL) trade is now down 47,64%!. The long LinkedIn (LNKD) and short Pandora (P) position is up 25.32%… bringing the average trade return so far this year to 2.21%, not bad, but far off what it was on Friday. Oh well!

Both trades will be closed out on the open today:)

It’s been a solid couple of weeks here for the stock picks. Despite being unable to close out new ones, my average long&short tech stock trade now averages well over 5% giving an annualized return over 50% so far this year. It doesn’t quite matchup to last year’s return but it’s still good enough for personal satisfaction. Add that to the current 2nd place in the stock picking competition, and a very solid performance of my 2012 Tech Stock Power Rankings (more on that in a few days) and you get the picture.

Thankfully, today I get a new option to trade. After announcing that I would now own up to 7 tech long & short trades at once last year, this is the first time I get the chance to do it. This and the upcoming Facebook IPO (FB just confirmed it would be listing on Nasdaq) expected to occur in May, these are good and exciting times. Today, I am opening a trade between 2 stocks that have been getting crushed in recent months, as you can see in their dismal trend analysis scores:)

Long Travelzoo (TZOO)

Well, funny how things happen. After spending much of last week researching Travelzoo, in order to determine if I did have regrets picking it as one of my 4 stock picks for 2012, I felt truly positive about the company. I did express my views on the company on Friday. Then, when looking through the companies that I follow this weekend, buying Travelzoo against Blue Nile seemed like a great opportunity. Why? They trade at comparable P/E’s despite having very different stories. I do think that this trade will end up doing very well:)

Short Blue Nile (NILE)

I know, I know, I look like a Blue Nile “hater”. I’m not. I’m just stunned over and over (and over and over) that the company continues to trade so expensively after so many years of continued disappointments. I did have a few successful trades already this year shorting Blue Nile against Apple 3 different times, all very successful trades!!! After that, I felt like I needed to get off of the bandwagon a bit in case NILE had a rebound. The stock has continued to fall though… but I still feel it’s overvalued. Clearly not as much as it was in January, but still overvalued. The company has absolutely no argument to justify its high price, its high P/E ratio, etc.

Disclosure: No positions on Travelzoo (TZOO) or Blue Nile (NILE), this trade will be opened on Monday morning

I’ve written a few times about how looking at dividend yield could be misleading. One part of the reason is that some companies end up paying more than they can afford to. FTR is one obvious example and I will discuss it a bit later but there are many more.

Can you believe that only one of the top 10 companies actually has a payout ratio under 75%!! To me that is shocking. Dividend investing is about much more than finding a big yield, it is about finding longer term stocks that will be able to increase their dividend yields over time.

I wrote about why dividend investing is not just a trend and I think that finding the right stocks to include is a critical part.

Today, we are back with our list of the top 100 dividend stocks from the S&P500 and there is no surprise in who is on top. I would caution greatly against investing based only off of a dividend yield though.

Frontier Communications Corp (FTR)

No big surprise again this month as Frontier Communications Corp (FTR) remains at the very top of our top dividend stocks in the S&P500 with a dividend yield close to 10%. The yield has come down from its high of 17% a few months ago but remains high for 2 reasons:

-The stock’s price keeps diminishing
-No one expects the company’s dividend to actually remain so high (yes, FTR’s dividend WILL diminish)

The dark side of course remains that the company is paying out much more than it is actually able to make, making that dividend everything but sustainable. Every month, I do more in-depth research to find dividend names and FTR has never come out on top of that research..!!

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FTR’s Dividend Payout History

FTR’s days at the top of this chart are nearing its end in my opinion (of course, it’s not the first time I’ve said this). Not only is FTR going to likely announce a dividend cut later this quarter but if things keep up, it will not be able to remain in the S&P500… should be interesting! Next week, we will do further research on the 100 stocks listed here to determine which ones are more likely to do well in the long term both based on sustainability and the 20 things that we look for in dividend stocks.

In the meantime, here is the list!

Today we are taking a look at the first quarter results from the friendly stock picking competition. After winning the first year, I was not able to repeat the next two ones so I was hoping to get back on top. So far, 3 of my 4 picks have done extremely well and honestly even the fourth isn’t terrible. That being said, while I am in second place, I’m nowhere near the top right now as WhereDoesAllMyMoneyGo did extremely well. That being said, 2nd place after a quarter with a very respectable return is a good start:) So let’s start by taking a look at my 4 picks:

Apple (AAPL) +48,04%

Clearly, I’ve been very bullish on Apple, ranking it #1 in my Tech Stock Power Rankings and writing a post about how crazy you’d be to not own Apple. It might be luck or whatever the reason might be, clearly, that has been a good call. Time will tell if it will keep up (I think so) but it’s not by luck that the 2 leaders have Apple (AAPL) among their picks.

Intel Corporation Inc (INTC) +16,85%

Both on the blog and in our mailing list, I’ve seen Intel Corp come out as one of the top dividend stocks that can be bought. It has an amazing business, trades at a decent valuation and should be able to keep increasing payouts for many years in the future.

Aflac (AFL) +7,03%

It’s not an exceptional return, but Aflac (AFL) is a very solid pick. It’s not by chance that Aflac is the stock that I decided to add to the Ultimate Sustainable Dividend Portfolio in my latest update.

Travelzoo (TZOO) -6,43%

I will be discussing Travelzoo (TZOO) later this week but I’ll simply say for now that I still have great belief in TZOO…more to come on Friday:)

So hopefully things keep improving in Q2… in the meantime, congrats to WDA who did very well in Q1. Here are the standings after Q1, I will be adding links towards their posts as they are published: