So it’s time for the second quarter update for my Perfect Dividend Portfolio, which I began to put together back in December and completed in April. I must take a moment to brag a bit; my portfolio is doing exactly what I wanted, and I am totally happy.
In this article, I’ll talk about how my three favorite companies are doing: Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), Meredith Corporation (NYSE:MDP) Publishing, and Sunoco Logistics Partners L.P. (NYSE:SXL).
For more information about my portfolio selection strategy, please read
this article.
Portfolio status and future plans
All of the companies scored at least 18 points on my rating system when I chose them. I will re-calculate their score once per quarter. Anything that drops below a 16 will be considered for replacement.
I am also keeping a close eye on the current yield. I intend to reinvest dividends once per quarter, after all ten companies have paid out, and I will reinvest in each company in the order in which I chose it, unless the company no longer scores at least an 18.
My portfolio as a whole is currently yielding 3.8%, with which I am very happy considering my minimum criterion is 3.0%. I’d like to keep the yield on the entire portfolio between 3.5% and 4.0%.
Based on current share prices, the portfolio is up 6%, and it has paid out 1.7% in dividends.
Individual Companies
Now, for a quick update on where the individual companies stand today:
My first selection was Abbott Laboratories (NYSE:ABT). Once the company split into two on January 3, I sold the Abbott shares (then yielding only 1.8%) and reinvested in AbbVie Inc (NYSE:ABBV) shares (then yielding 5.0%). AbbVie Inc (NYSE:ABBV) paid out its dividend on May 15. The company is currently trading at $42 per share, up 32% from where I bought it in December. AbbVie Inc (NYSE:ABBV)‘s rating is a mix of the Abbott Laboratories (NYSE:ABT) and AbbVie Inc (NYSE:ABBV) metrics, and it now scores a 20 on my scoring system.
While I acknowledge that AbbVie Inc (NYSE:ABBV) is a new company and separate from Abbott Laboratories (NYSE:ABT), I believe that the management team will attempt to continue the same dividend growth strategy that Abbott Laboratories (NYSE:ABT) has pursued. Should AbbVie Inc (NYSE:ABBV) prove to follow a different dividend growth strategy, I will assess and remove it from my portfolio when it becomes necessary.
was my second selection, and it paid a dividend on May 31. It is currently trading at $88, up 9% from where I purchased it. Partnerre Ltd (NYSE:PRE)’s dividend yield has dropped to 2.9%, and its score has dropped to 17, so I’m considering it for replacement next quarter.
paid a dividend on May 7. It is trading at $59, up 21%. Enterprise Products Partners L.P. (NYSE:EPD) has a 15-year history of raising dividends, and a 5-year DGR of 5.7%. The partnership has increased its dividend twice so far this year; its second quarter dividend was an increase of 7% over the same quarter last year. However, the dividend metrics have softened since I chose it; I am considering it for replacement.
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
continues to delight me. The company paid a dividend on May 6. It’s trading at $95, up 49%. Interestingly enough, Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)‘s robust share price growth was matched by a significant increase in its dividend (50%), so it is still yielding 3.3%, and it has improved to a 20 on my scoring system.
A blowout earnings report shows that management is definitely doing something right with this company. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) currently pays out a reasonable 38% of earnings, but an even lower 16% of free cash flow, which it actually increased by over 100% year-over-year. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
seems to be doing everything right, and they are rewarding their shareholders as they should.
