High Yield Dividend Champion February Update

The High Yield Dividend Champion Portfolio is a publicly tracked stock portfolio on Scott’s Investments.  Its goal is to capture quality high yield stocks with a history of raising dividends.

The screening process for this portfolio starts with the “Dividend Champions” as compiled by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years.  Stocks from the Dividend Champion list are then ranked on yield, payout ratio, P/E, and 3 year dividend growth rate.

Stocks will be sold at the re-balance date (generally around the 5th of the month) when they drop out of the top 15 (to limit turnover) and are replaced with the next highest rated stock.

The top 15 stocks  are below and displayed in order of their overall ranking (figures are January month-end):

Name Symbol Yield Payout P/E 3-yr DGR
Helmerich & Payne Inc. HP 4.62 42.64 9.23 116.13
Chevron Corp. CVX 4.17 39.41 9.44 10.86
ExxonMobil Corp. XOM 3.16 34.72 11.00 13.43
Old Republic International ORI 5.20 51.05 9.82 1.41
AT&T Inc. T 5.71 57.67 10.10 2.27
Eagle Financial Services EFSI 3.44 41.88 12.17 2.26
Tompkins Financial Corp. TMP 3.28 46.67 14.24 4.99
Community Trust Banc. CTBI 3.80 47.24 12.43 1.60
AFLAC Inc. AFL 2.73 24.45 8.95 6.36
First Financial Corp. THFF 3.02 38.89 12.86 1.41
Emerson Electric EMR 3.30 61.64 18.67 7.04
Eaton Vance Corp. EV 2.48 40.65 16.36 7.62
McDonald’s Corp. MCD 3.68 70.54 19.18 9.04
Weyco Group Inc. WEYS 2.81 46.63 16.58 5.43
Mercury General Corp. MCY 4.32 63.33 14.65 0.72
Consolidated Edison ED 3.75 61.47 16.38 1.64

As previously stated EFSI is not purchased due to its low liquidity.

For February there is no turnover in the portfolio.  The current portfolio is below:

 

Position Average Purchase Price Initial Purchase Date Percentage Gain/Loss Excluding Dividends
CVX 108.06 12/6/2012 1.16%
MCD 96.54 1/3/2014 -2.28%
ORI 16.22 4/4/2014 -9.19%
MCY 50.75 9/5/2014 18.27%
TMP 44.46 8/6/2014 19.52%
CTBI 36.55 5/5/2014 -10.53%
XOM 89.01 4/5/2013 3.76%
HP 90.57 10/6/2014 -25.94%
T 32.34 3/6/2014 6.80%
AFL 58.63 1/9/2015 4.01%

I also created a second portfolio using similar metrics as the High Yield Dividend Champion portfolio. The primary difference is it only requires 10 years of dividend increases and it also hedges the portfolio during unfavorable market conditions. Hedging requires margin, but the portfolio can also be implemented without the hedge. The portfolio is available on Portfolio123 and backtested results were posted in the June update.

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