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Dividend stocks are key in the sense that they deliver income even while there is continuing market turbulence.

David Meier of the Motley Fool summarized the current conditions as follows: "It's not a dividend investor's world these days." For the long term investor, dividend stocks have significant benefits in terms of providing income and growth potential. We continue to examine different portfolios to see what we can learn.

Meier outlined 11 outstanding Dividend stocks which are summarized here:

Classics

  • Wal-Mart (NYSE:WMT)
  • Pepsi (NYSE:PEP)

International

  • PM -- Philip Morris for which we use BTI as a proxy as it has longer history

Pharma Juggernauts

  • Abbott Labs (NYSE:ABT)
  • Johnson and Johnson (NYSE:JNJ)

Quietly Consistent

  • Aflac (NYSE:AFL)
  • Bemis (NYSE:BMS)

Tech up and comers

  • Intel (NASDAQ:INTC)
  • KLA Tencor (NASDAQ:KLAC)

Non-Traditional

  • Brookfield Infrastructure Partners (NYSE:BIP)
  • Autoliv Inc. (NYSE:ALV)

We entered these funds into our system and then compared them to a balanced portfolio of dividend producing ETFs.

Asset

Fund in the portfolio

REAL ESTATE ICF (iShares Cohen & Steers Realty Majors)
CASH CASH
FIXED INCOME TIP (iShares Barclays TIPS Bond)
Emerging Market VWO (Vanguard Emerging Markets Stock ETF)
US EQUITY DVY (iShares Dow Jones Select Dividend Index)
US EQUITY VIG (Vanguard Dividend Appreciation ETF)
INTERNATIONAL EQUITY IDV (iShares Dow Jones Intl Select Div Idx)
High Yield Bond HYG (iShares iBoxx $ High Yield Corporate Bd)
INTERNATIONAL BONDS EMB (iShares JPMorgan USD Emerg Markets Bond)
Portfolio Performance Comparison

Portfolio/Fund Name

1Yr AR

1Yr Sharpe

3Yr AR

3Yr Sharpe

5Yr AR

5Yr Sharpe

Fools 11 Incredible Dividend Stocks 30% 209% 5% 21%
Retirement Income ETFs Strategic Asset Allocation Moderate 16% 162% 4% 17% 5% 25%
Retirement Income ETFs Tactical Asset Allocation Moderate 12% 127% 10% 79% 11% 80%

Three Year Chart

click to enlarge

This is a pretty reasonable return with a similar performance to the ETF portfolio. The performance is still below the tactical asset allocation based on the punishment that all stocks took in the great recession.

Careful consideration should be given to this portfolio compared to others that may have higher growth but no returns -- for example:

This portfolio doesn't have enough history so it will be interesting to track it and see how it performs going forward.

Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

Disclosure: Author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: David Meier's 11 Incredible Dividend Stocks as a Portfolio