Dividend Champion Portfolio – September 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.

I made one change to the screen methodology for 2016 in order to further simplify the process. Stocks from the Dividend Champion list were previously ranked on yield, payout ratio, P/E, and 3 year dividend growth rate.

In 2016 stocks are ranked on yield, P/E and 3 year dividend growth rate but payout ratio is no longer a factor.  The modification has a relatively low impact on screen results.

Stocks will still be 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 25 stocks using the new method  are below and displayed in order of their overall ranking (figures are from the end of August):

Name Symbol Yield P/E 3-yr
Target Corp. TGT 3.42 13.63 17.84
AT&T Inc. T 4.70 17.62 2.22
Helmerich & Payne Inc. HP 4.63 999.00 114.15
Altria Group Inc. MO 3.69 22.95 8.36
Emerson Electric EMR 3.61 18.95 5.40
T. Rowe Price Group TROW 3.11 16.80 15.21
Old Republic International ORI 3.90 12.57 1.39
Questar Corp. STR 3.52 22.53 8.10
Eagle Financial Services EFSI 3.37 10.75 3.10
Weyco Group Inc. WEYS 3.29 17.01 6.18
Computer Services Inc. CSVI 3.01 18.54 21.05
Community Trust Banc. CTBI 3.47 13.96 2.25
Consolidated Edison ED 3.56 19.39 2.42
HCP Inc. HCP 5.85 999.00 4.16
Universal Corp. UVV 3.52 18.46 2.00
Chevron Corp. CVX 4.26 999.00 6.83
ExxonMobil Corp. XOM 3.44 34.58 9.73
Coca-Cola Company KO 3.22 24.96 8.97
MDU Resources MDU 3.18 15.31 2.90
WGL Holdings Inc. WGL 3.10 17.70 4.80
Archer Daniels Midland ADM 2.74 17.72 16.96
Bowl America Class A BWL-A 4.72 40.06 1.78
Wal-Mart Stores Inc. WMT 2.80 15.36 7.78
National Retail Properties NNN 3.63 42.82 3.11
Vectren Corp. VVC 3.27 21.83 3.11

There is no turnover in positions for this month.  The current portfolio is below.  A note on CSVI, which was purchased last month.  It is small cap ($521M market cap) and thinly traded stock (average 3 month volume of 3040 shares per day) :

Position Shares Average Purchase Price Initial Purchase Date Percentage Gain/Loss Excluding Dividends
CTBI 630 33.9 7/5/2016 9.85%
EMR 425 49.64 8/4/2015 6.41%
ORI 1145 16.22 4/4/2014 17.32%
CSVI 634 39.2 8/5/2016 -5.10%
TGT 391 68.65 6/3/2016 1.18%
MO 400 58.14 1/7/2016 14.21%
TROW 300 71.35 7/5/2016 -3.52%
HP 341 80.9 10/6/2014 -22.27%
STR 1075 25.03 5/6/2016 -0.04%
T 650 38.13 3/7/2016 8.03%

 

The current equity curve for the portfolio is below (through 9/8/16):

champ