Dividend Champion Portfolio April 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 are sold on 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 March month-end):

Name Symbol Yield Payout P/E 3-yr
Helmerich & Payne Inc. HP 4.04 40.92 10.13 116.13
Chevron Corp. CVX 4.08 42.25 10.36 10.86
ExxonMobil Corp. XOM 3.25 36.36 11.20 13.43
Old Republic International ORI 4.95 51.75 10.45 1.41
Community Trust Banc. CTBI 3.62 48.19 13.32 1.60
Eagle Financial Services EFSI 3.27 38.65 11.84 2.26
Tompkins Financial Corp. TMP 3.12 48.55 15.56 4.99
Universal Corp. UVV 4.41 65.62 14.88 2.04
Universal Health Realty Trust UHT 4.52 63.82 14.13 1.29
Cincinnati Financial CINF 3.45 57.86 16.75 2.78
Emerson Electric EMR 3.32 59.68 17.97 7.04
Questar Corp. STR 3.52 65.12 18.50 6.55
T. Rowe Price Group TROW 2.57 46.74 18.20 12.38
Johnson & Johnson JNJ 2.78 49.12 17.65 7.05
Altria Group Inc. MO 4.16 81.25 19.54 8.14

EFSI is not eligible for purchase due to its low liquidity.

There is turnover in two positions for April. Consolidate Edison (ED) , a holding for one month, was sold for a capital gain of 1.03%.  AFLAC (AFL) , a holding since January, was sold for a capital gain of 9.57%.

The proceeds were used to purchase Universal (UVV) and Universal Health Realty Trust (UHT).

The current portfolio is below:

 

Position Average Purchase Price Initial Purchase Date Percentage Gain/Loss Excluding Dividends
CVX 108.06 12/6/2012 -1.30%
CINF 52.47 3/6/2015 2.38%
ORI 16.22 4/4/2014 -7.15%
UVV 47.3 4/8/2015 0.00%
TMP 44.46 8/6/2014 21.41%
CTBI 36.55 5/5/2014 -10.40%
XOM 89.01 4/5/2013 -5.56%
HP 90.57 10/6/2014 -21.30%
STR 22.8 3/6/2015 3.86%
UHT 55.27 4/8/2015 0.00%

I also have  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.

4 thoughts on “Dividend Champion Portfolio April Update”

  1. Hi Scott,

    I just discovered your articles and am very interested in your Dividend Champion Portfolio. I was wondering how you rank the stocks based on yield, payout ratio, P/E, and 3 year dividend growth rate? For instance, you state that you 1st sort the stock based on yield in order to eliminate about 50% of the list. Does that mean the highest yielding stock is ranked 1, the next highest 2. etc.? Do you then sort and do the same for each category? So if you ended up with a list of 50 stocks, each category would assign a rank to each stock from 1 to 50, then the 15 stocks with the lowest total would make up the list? Also, when you have to replace any stocks on the the list, do you disregard stock price and just purchase the stocks on the specific day in question?

    It seems that you’ve been doing this portfolio for quite some time and have found success.

    Regards,
    Angelo M Reina

    1. Hi, Yes, essentially each stock is assigned a rank for each category and then the category ranks are totaled to generate an overall rank. Stocks are purchased/sold solely based on rank, not share price.

  2. You mention “unfavorable market conditions”.
    How would you define “unfavorable market conditions” ?
    I would say it is when the S&P Index breaks its 200 day moving average.

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