Dividend Champion Portfolio 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 April month-end):

Name Symbol Yield Payout P/E 3-yr
Chevron Corp. CVX 3.85 42.25 10.96 10.86
Helmerich & Payne Inc. HP 3.53 42.18 11.96 116.13
ExxonMobil Corp. XOM 3.34 38.47 11.51 13.43
Old Republic International ORI 4.84 51.75 10.69 1.41
Eagle Financial Services EFSI 3.33 38.28 11.51 2.26
Community Trust Banc. CTBI 3.74 47.43 12.68 1.60
Tompkins Financial Corp. TMP 3.22 48.55 15.07 4.99
Universal Health Realty Trust UHT 5.11 63.82 12.48 1.29
Cincinnati Financial CINF 3.63 57.86 15.92 2.78
Questar Corp. STR 3.58 65.12 18.17 6.55
Universal Corp. UVV 4.42 65.62 14.84 2.04
Sonoco Products Co. SON 3.13 52.43 16.74 3.36
SJW Corp. SJW 2.67 30.71 11.52 2.82
Johnson & Johnson JNJ 3.02 53.67 17.75 7.05
WGL Holdings Inc. WGL 3.36 62.50 18.58 4.15

 

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

There is no turnover in positions for May.

The current portfolio is below:

Position Average Purchase Price Initial Purchase Date Percentage Gain/Loss Excluding Dividends
CVX 108.06 12/6/2012 -0.10%
CINF 52.47 3/6/2015 -3.20%
ORI 16.22 4/4/2014 -6.78%
UVV 47.3 4/8/2015 0.49%
TMP 44.46 8/6/2014 14.24%
CTBI 36.55 5/5/2014 -12.12%
XOM 89.01 4/5/2013 -0.92%
HP 90.57 10/6/2014 -13.71%
STR 22.8 3/6/2015 0.70%
UHT 55.27 4/8/2015 -15.78%

The equity curve for the portfolio (green) and two benchmarks is below:

Portfolio

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 are below.  Backtests are from 1/2/99 – 5/6/15 and include a variable slippage assumption (based on liquidity of stocks purchased) to help account for trading slippage:

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stats

Once on Portfolio123 search for ‘Scott’s Dividend Champ Portfolio Hedged’ in the Ready-to-Go section.

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