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Deep Value Dividend Growth Index: Week 6 update

Posted On December 31, 2016 12:09 am
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Click here to read up on the intro to this portfolio, the theory behind it, and its methodology.

Wow what a boring week it was. Market hardly moved at all, on low volume no less, which is to be expected for the last week of the year. Of course, given that a dividend portfolio is a collection of businesses, a boring week is not a bad thing. Most of successful investing consists of long periods of boredom interspersed with brief periods of excitement, (what most investors consider “terror”).

The only stocks added this week were Delta Airlines (DAL), and ONEOK Partners (OKS).

Portfolio Stats:

Portfolio Holdings: 151 (149 last week)

Yield: 3.47% (S&P yield 2.01%)

Lowest Yielding Holdings:

MercadoLibre (MELI): 0.38%
Shire PLC (SHPG): 0.48%
NVIDIA (NVDA): 0.51%

Highest Yielding Holdings:

Ladder Capital (LADR): 13.41%
Icahn Enterprises (IEP): 9.46%
Starwood Property Trust (STWD): 8.56%

PE: 16.69 (14% below S&P 500)

FCF Margin: 18.06% (rich in free cash flow is rich in dividends)

Return on Assets: 7.61% (16% above S&P 500 average)

Return on Equity: 48.67% (129% above S&P 500 average)

Market Cap: $17.0 billion (78% below S&P 500 average)

Smallest Market Cap Holdings:

Jernigan Capital (JCAP): $175.2 million
Farmland Partners (FPI): $194.7 million
Medequities Realty Trust (MRT): $357.1 million

Largest Market Cap Holdings: 

Apple (AAPL): $616.5 billion
Wells Fargo (WFC): $282.4 billion
AT&T (T): $261.6 billion

Projected 5 Year EPS growth: 9.0% (5% above S&P 500 average)

Projected Annual Total Return: 12.5% (37% above the market’s historic CAGR since 1871)

Portfolio Composition: 

REIT:                                     22.17%
Industrial:                           14.31%
Consumer Cyclical:         13.12%
Consumer Defensive:     11.32%
Energy:                                   9.42%
Healthcare:                           8.5%
Finance:                                 7.5%
Tech:                                        6.88%
Utilities:                                  3.29%
Telecom:                                1.85%
Basic Materials:                   1.66%

Largest Holdings:
Lockheed Martin (LMT): 2.28%
Icahn Enterprises (IEP): 1.37%
Jernigan Capital (JCAP): 1.27%

Smallest Holdings:
Delta Airlines (DAL): 0.45%
Gildan Activewear: 0.46%
Kimco Realty (KIM): 0.46%

Portfolio Performance:

Portfolio Annualized Total Return: 5.10%
S&P 500: 3.31%
Outperformance (Alpha): 1.79% (54%)

Best Performers:
Energy Transfer Equity (ETE): 17.46%
NVIDIA (NVDA): 17.08%
AT&T(T): 13.23%

Worst Performers:
VF Corp (VFC): -8.08%
Hanesbrands (HBI):-7.15%
Expedia (EXPE): -5.62%

Conclusion

This week’s relatively small decline might be caused by year end tax loss harvesting, and next week we might see some profit taking, given that the new year brings with it the hope of new, and lower tax rates.

In the end of course none of the matters to us, because we know the key to ultimate victory is discipline, consistency, and above all else, time.

Happy New Year to everyone from the Dividend Sensei:)

 

About author

Dividend Sensei
Dividend Sensei

I’m an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, Investorplace.com, and TheStreet.com.

My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 20 years of investing experience, I’ve learned what works and more importantly, what doesn’t, when it comes to building long-term wealth and income streams. I’m currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that:

1. Pays a 4% to 5% yield
2. Offers 9% to 10% annual dividend growth
3. Pays dividends AT LEAST on a weekly, but preferably, daily basis