Ultimate Sustainable Dividend Portfolio – May 2014 Update – New Record!!

By: ispeculatornew
Date posted: 05.14.2014 (3:00 am) | Write a Comment  (4 Comments)

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moneytreeIn September 2011, 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. I would personally say that things have been going very well and will certainly continue to evolve. I do have a few more things planned which I will discuss in the near future.

The USDP is obviously a critical part of my now very public quest to replace my job income with passive income. you can see my most recent update here.

The past month has been a great one with the overall markets doing very well. I’ll also be trading for the USDP in the coming days and have more about that later in this post. I’ll be looking for 1-2 new stocks and will be going through the process in the newsletter in the next few days.

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Keep in mind that this portfolio was built by selecting 20 stocks out of thousands. The goal is not to pick the 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:

TickerNameSharesMay 13 2014 PriceMay 13 2014 Values
OMCOmnicom Group Inc31$68.77$2,131.87
MSFTMicrosoft Corp74$40.42$2,991.08
JCIJohnson Controls Inc41$45.08$1,848.28
PEPPepsiCo Inc/NC29$87.23$2,529.67
ETNEaton Corp33$73.20$2,415.60
DOVDover Corp25$86.58$2,164.50
KNKnowles Corp12.5$30.02$375.25
ITWIllinois Tool Works Inc29$86.90$2,520.10
XLNXXilinx Inc39$46.18$1,801.02
SJMJM Smucker Co/The20$100.40$2,008
BLKBlackRock Inc12$302.96$3,635.52
TROWT Rowe Price Group Inc30$81.32$2,439.60
OXYOccidental Petroleum Corp23$97.52$2,242.96
COPConocoPhillips26$78.64$2,044.64
XOMExxon Mobil Corp21$102.36$2,149.56
ADIAnalog Devices Inc45$51.47$2,316.15
HASHasbro Inc31$55.50$1,720.50
MATMattel Inc44$39.74$1,748.56
INTCIntel Corp55$26.45$1,454.75
AFLAflac30$63.73$1,911.90
BAXBaxter International25$75.41$1,885.25
IVZInvesco Ltd68$36.04$2,450.72
VWOVanguard FTSE Emerging Markets61$42.19$2,573.59
BNDVanguard Total Bond Market34$81.80$2,781.20
Cash$1,050.81
USDP$53,191.08
SPX15.32335164$3,427.01$53,513.28

Dividends Received

Wow.. the below chart looks AMAZING:) I’m very excited to say that the USDP will end up generating $179 this month, setting a new record. It’s not enough to live by but we’re clearly making progress here. Part of the reason is the $1000 that I’m investing every month but the portfolio has also performed extremely well.

usdp2

Ultimate Sustainable Dividend Portfolio News

Some positive news as 3 stocks will be paying a bit more:

XOMExxon Mobil CorpDividend increase from $0.63 to $0.69, a 9.5% increase
BAXBaxter InternationalDividend increase from $0.49 to $0.52, a 6.1% increase
IVZInvesco LtdDividend increase from $0.225 to $0.25, a 11.1% increase

Returns

As has been fairly typical, in a month where the market performed extremely well, the USDP underperformed slightly which is what you’d generally expect from an income focused portfolio.

usdp1

Trades

Last month, I mentioned that I had received Knowles Corp (KN) as a spin-off. It does not have a dividend history and frankly, I’d rather not own the stock at this point. I decided to take a look at the key metrics for the stocks of the portfolio looking for anything else that looks very off.
TickerNameDVD 1Y GrowthDVD 5Y Gr.Sales 5Y GrEPS 5Y Gr.Payout RatioP/E
OMCOmnicom Group Inc23.0821.6758.442.8817.73
MSFTMicrosoft Corp24.4217.398.5616.9435.1914.26
JCIJohnson Controls Inc10.819.5411.37N/A41.7714.68
PEPPepsiCo Inc5.585.959.293.0151.219.7
ETNEaton Corp PLC13.7512.7214.9N/A42.7417
DOVDover Corp8.069.26.8434.2625.7116.45
KNKnowles CorpN/AN/AN/AN/A0N/A
ITWIllinois Tool Works Inc9.336.273.59N/A43.821.84
XLNXXilinx Inc14.2913.1810.2918.7742.2620.73
SJMJM Smucker Co/The10.78-17.714.5721.5341.5917.66
BLKBlackRock Inc12.7817.4426.665.7339.0117.6
TROWT Rowe Price Group Inc-34.1710.2520.5454.9838.1920.89
OXYOccidental Petroleum Corp16.8115.5816.2245.7734.913.91
COPConocoPhillips3.417.752.2838.4441.6614.38
XOMExxon Mobil Corp10.269.7512.6420.834.3113.93
ADIAnalog Devices Inc12.111.686.6678.7860.3223.49
HASHasbro Inc10.1415.31.88N/A72.8823.4
MATMattel Inc13.1814.254N/A55.216.27
INTCIntel Corp09.9513.6657.2546.5614.32
AFLAflac Inc5.887.573.6914.3720.910.32
BAXBaxter International Inc16.3215.477.07N/A49.715.67
The stocks I’ll be looking to replace at this point are:
Certainly – KN
Possible – ITW, HAS, COP
I’ll likely end up getting rid of 2 names and replacing it with a new name. Stay tuned, the trade will likely happen soon:)
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4 Comments

  1. Comment by Ken — May 15, 2014 @ 10:11 am

    Do you automatically reinvest dividends in some kind of DRIP plan?

  2. Comment by IS — May 15, 2014 @ 11:13 am

    @Ken – Yes either a DRIP or a do-it-myself one depending on stocks, etc.

  3. Comment by Ken — May 15, 2014 @ 12:42 pm

    I have another question. If your portfolio performs about the same as the S&P 500, why not just buy SPY instead of your entire basket?

  4. Comment by IS — May 15, 2014 @ 6:42 pm

    I guess I do hope to beat the S&P500 over time, especially when markets go south. Also, the dividend yield in my portfolio is significantly higher than the S&P500. And finally, I prefer to avoid some sectors (such as banks for example) which is easier to do this way.

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