Deep Value Dividend Growth Index 1 Year Review: Crushing The Market By 58% By Bargain Hunting

Posted On November 16, 2017 1:25 pm

Portfolio Stats:

Portfolio Holdings: 200

Yield: 6.9% (S&P yield 1.87%)
Yield on Cost: 7.12%

Lowest Yielding Holdings:
MercadoLibre (MELI): 0.22%
NVIDIA (NVDA): 0.28%
Charles Schwab (SCHW): 0.72%
Perrigo (PRGO): 0.74%
MarketAxess Holdings (MKTX): 0.76%
Albemarle (ALB): 0.89%
Fedex (FDX): 0.90%
Constellation Brands (STZ): 0.94%
Owens-Corning (OC): 0.97%
Nordson (NDSN): 0.99%

Highest Yielding Holdings:
Uniti Group (UNIT): 14.76%
Dynagas LNG Partners (DLNG): 12.98%
Alliance Holdings (AHGP): 11.49%
New Residential Investment Corp (NRZ): 11.47%
Golar LNG Partners (GMLP): 10.75%
PBF Logistics (PBFX): 9.97%
KNOT Offshore Partners (KNOP): 9.88%
Sprague Resources (SRLP): 9.84%
Delek Logistics Partners (DKL): 9.81%
Hoegh LNG Partners (HMLP): 9.64%
Ciner Resources (CINR): 9.33%

Valuation Metrics

PE: 18.72 (9% below S&P 500)

Price/Fair Value: 0.87

FCF Margin: 18.62% (vs S&P 500’s 21.13%)

Return on Assets: 5.20% (31% below S&P 500 average)

Return on Equity: 21.45% ( S&P 500 average)

Average Market Cap: $6.3 billion (93% below S&P 500 average)

Projected 5 Year Dividend Growth: 7.56% (22% above S&P 500 20 year median of 6.1%)

Projected Annual Total Return: 14.58% (61% above the market’s historic CAGR since 1871)

Potential Annual Total Return (assuming valuation regresses to the mean): 16.76% (85% above market’s historical return)

Smallest Market Cap Holdings:
Gladstone Land (LAND): $187.4 million
Global Medical REIT (GMRE): $199.2 million
Jernigan Capital (JCAP): $285.3 million
MedEquities Realty Trust (MRT): $343.6 million
City Office REIT (CIO): $388.9 million
Landmark Infrastructure Partners (LMRK): $391.6 million
PennantPark Floating Rate Capital (PFLT): $451.0 million
WhiteStone REIT (WSR): $559.0 million
Westwood Holdings Group (WHG): $567.1 million
Sprague Resources (SRLP): $570.6 million

Largest Market Cap Holdings:
Apple (AAPL): $880.5 billion
JPMorgan Chase (JPM): $336.4 billion
Bank Of America (BAC): $272.5 billion
Wells Fargo (WFC): $264.0 billion
Anheuser-Busch InBev (BUD): $224.9 billion
Pfizer (PFE): $211.4 billion
AT&T (T): $207.9 billion
Oracle (ORCL): $205.1 billion
Novartis (NVS): $191.9 billion
Toyota Motor (TM): 183.2 billion

Portfolio Composition: 

REIT:                            32.65%
Consumer Cyclical:    17.03%
Energy:                         13.94%
Industrials:                  10.93%
Healthcare:                   4.80%
Tech:                               4.77%
Basic Materials:            4.67%
Finance:                         3.68%
Consumer Defensive:  3.61%
Telecom:                        2.20%
Utilities:                           1.71%

Largest Holdings:

Uniti Group (UNIT): 17.90%
L Brands (LB): 5.89%
Helmerich & Payne (HP): 4.76%
Dynagas LNG Partners (DLNG): 2.39%
Omega Healthcare Investors (OHI): 2.31%
Delek Logistics Partners (DKL): 1.83%
KNOT Offshore Partners (KNOP): 1.82%
NetEase (NTES): 1.80%
Ciner Resources (CINR): 1.75%
Expedia (EXPE): 1.75%

Top 10 Holdings: 42.2%

Worst Performers:
Macquarie Infrastructure (MIC): -7.68%
Neilsen Holdings (NLSN): -7.51%
McKesson Corp (MCK): -7.1%
Enbridge Inc (ENB): -7.07%
Cardinal Health (CAH): -6.03%
British Telecom (BT): -5.84%
KNOT Offshore Partners (KNOP): -5.82%
Bunge (BG): -5.65%
Delek Logistics Partners (DKL): -4.95%
Emerson Electric (EMR): -4.87%

Best Performers:
Novo Nordisk (NVO): 51.04%
HollyFrontier (HFC): 48.98%
Constellation Brands (STZ): 48.96%
Polaris Industries (PII): 36.19%
Thor Industries (THO): 35.44%
NVIDIA (NVDA): 35.30%
VF Corp (VFC): 30.43%
QCOM (QCOM): 28.49%
Huntington Ingalls Industries (HII): 28.37%
TD Ameritrade (AMTD): 28.06%

Portfolio Performance:

Portfolio Annualized Total Return: 32.95%
S&P 500: 20.79%
Outperformance (Alpha): 12.16% Beating Market For Last 8/12 months, currently beating market by 58% so far

Despite the portfolio becoming highly concentrated in certain stocks and sectors, (particularly beaten down REITs) we still managed to put up remarkable outperformance in the first year of the portfolio.

This shows both the power of good stock picking, and shows that even with 200 holdings, we managed to beat the far more diversified, and lower quality mix of the S&P 500 (which has plenty of operationally poor holdings).

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, and DividendSensei.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 22 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 5% yield 2. Offers 7% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

Related Articles