In May, I announced my intention to create a portfolio that embodied life’s basic needs. Understandably, many of the truly basic needs in our everyday lives have transcended far beyond just the need for water and shelter. To that end, over a period of 10 weeks I detailed 10 diverse companies that I feel will outperform the broad-based S&P 500 over a three-year period because of their ability to outperform in both bull and bear markets, and command incredible pricing power in nearly any economic environment.
If you’d like a closer look at what my reasoning was behind each selection, you can do so by clicking on any, or all, of the portfolio components below:
1). Waste Management
2). Intel
3). NextEra Energy
4). MasterCard
5). Chevron
6). Select Medical
7). Ford
8). American Water Works
9). Procter & Gamble
10). AvalonBay Communities
Let’s take a look at how our portfolio of basic needs stocks fared this week:
| Company | Cost Basis | Shares | Total Value | Return |
|---|---|---|---|---|
| Waste Management | $42.60 | 23.24 | $1,003.97 | 1.4% |
| Intel Corporation (NASDAQ:INTC) | $23.22 | 42.64 | $959.83 | (3.1%) |
| NextEra Energy | $87.94 | 11.26 | $971.29 | (1.9%) |
| MasterCard | $645.57 | 1.53 | $976.08 | (1.2%) |
| Chevron | $124.95 | 7.93 | $971.43 | (2%) |
| Select Medical Holdings Corporation (NYSE:SEM) | $8.96 | 110.49 | $994.41 | 0.4% |
| Ford Motor Company (NYSE:F) | $17.50 | 56.57 | $962.65 | (2.7%) |
| American Water Works Co., Inc. (NYSE:AWK) | $43.13 | 22.96 | $991.18 | 0.1% |
| Procter & Gamble | $81.29 | 12.18 | $994.38 | 0.4% |
| AvalonBay Communities Inc (NYSE:AVB) | $133.95 | 7.39 | $983.76 | (0.6%) |
| Cash | $0.88 | |||
| Dividends receivable | $0 | |||
| Total commission | ($100.00) | |||
| Original investment | $10,000.00 | |||
| Total portfolio value | $9,809.86 | (1.9%) | ||
| S&P 500 performance | (1.1%) | |||
| Performance relative to S&P 500 | (0.8%) |
Source: Yahoo! Finance.
Dividend news this week
Ford Motor Company (NYSE:F) announced in mid-July that it would be paying out a $0.10 quarterly dividend on Sept. 3 for shareholders on record as of Aug. 2. With Alan Mulally’s focus on international sales and fuel-efficient engines going so well, Ford Motor Company (NYSE:F) doubled its dividend to $0.10 per quarter from $0.05 per quarter earlier this year, restoring the company to its pre-recession payout levels.
Intel Corporation (NASDAQ:INTC), on the other hand, declared a quarterly stipend of $0.225 per share in late July, payable to shareholders on Sept. 1 who are on record as of Aug. 7. Intel Corporation (NASDAQ:INTC)’s business growth has been put into question because of the proliferation of smartphones and tablets, which have pressured legacy PC sales. While still generating significant cash flow from its dominant microprocessor position in PCs, Intel Corporation (NASDAQ:INTC) is doing what it can to reinvest in cloud-computing hardware and mobile processing innovations for the future.
Earnings news this week
Perhaps this week’s most surprising earnings report came from the market-cap midget of this portfolio, hospital operator Select Medical Holdings Corporation (NYSE:SEM). For the second quarter, Select Medical Holdings Corporation (NYSE:SEM) saw its revenue improve roughly 1% to $756.7 million as net operating income fell by nearly 6% to $88.3 million. The company’s specialty hospital segment saw revenue increase by just 0.4% and EBITDA fall 5.7% while its outpatient rehabilitation operations delivered gains on both fronts. The truly exciting part was that Select Medical Holdings Corporation (NYSE:SEM)’s adjusted profit of $0.27 per share topped EPS expectations of $0.24 by Wall Street and it backed its previously issued full-year revenue forecast. The company also declared a $0.10 quarterly dividend payable on Aug. 30 for shareholders on record as of Aug. 20.
