Dividend Champion Portfolio July 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 June month-end):

Name Symbol Yield Payout 3-yr P/E
Helmerich & Payne Inc. HP 3.91 42.24 116.13 10.82
Chevron Corp. CVX 4.44 46.83 10.86 10.55
ExxonMobil Corp. XOM 3.51 43.84 13.43 12.49
Eagle Financial Services EFSI 3.40 38.28 2.26 11.24
Emerson Electric EMR 3.39 49.47 7.04 14.59
Wal-Mart Stores Inc. WMT 2.76 40.08 10.98 14.51
Community Trust Banc. CTBI 3.44 47.43 1.60 13.78
Universal Health Realty Trust UHT 5.51 64.65 1.29 11.73
Cincinnati Financial CINF 3.67 54.12 2.78 14.76
Questar Corp. STR 4.02 65.63 6.55 16.34
Universal Corp. UVV 3.63 53.75 2.04 14.81
WGL Holdings Inc. WGL 3.41 54.25 4.15 15.92
Tompkins Financial Corp. TMP 3.13 48.41 4.99 15.48
Black Hills Corp. BKH 3.71 56.25 2.23 15.16
Old Republic International ORI 4.73 66.07 1.41 13.96

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

As with last month there is no turnover in positions for May. However, since we have passed the mid way point of the year I will take this opportunity to rebalance the portfolio.  A portion of UVV, 117 shares, will be sold and the proceeds used to purchase 80 shares of CVX.  The rebalance brings UVV’s allocation to 10.22% and CVX to 10.59%.

The current portfolio is below:

 

Position Average Purchase Price Before Rebalance Initial Purchase Date Percentage Gain/Loss Excluding Dividends Before Rebalance Current Yield Current Allocation Before Rebalance
CVX 108.06 12/6/2012 -12.28% 4.52% 6.72%
CINF 52.47 3/6/2015 -0.25% 3.52% 10.03%
ORI 16.22 4/4/2014 -2.84% 4.70% 9.27%
UVV 47.3 4/8/2015 21.18% 3.63% 13.70%
TMP 44.46 8/6/2014 21.84% 3.10% 11.94%
CTBI 36.55 5/5/2014 -5.55% 3.48% 12.10%
XOM 89.01 4/5/2013 -7.28% 3.54% 8.31%
HP 90.57 10/6/2014 -27.68% 4.20% 8.01%
STR 22.8 3/6/2015 -6.01% 3.92% 9.47%
UHT 55.27 4/8/2015 -13.64% 5.36% 9.76%

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