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“I don’t have time to invest in individual stocks.”

This is a common saying I hear. A part of it is certainly true -- most people simply don’t have time to spend many hours per week researching companies and fine tuning their portfolios.

But there’s a middle ground. Investors can, in addition to their passive funds, own a concentrated, diversified portfolio of individual dividend stocks that:

  1. They understand
  2. Are low maintenance
  3. Constitute good long-term holdings

Here are three examples of this sort of portfolio. I don’t necessarily recommend every company, and specific selections would be based on what companies an individual is bullish on, but they get the point across.

Portfolio 1

Company Ticker Dividend Yield
The Coca Cola Company KO 2.85%
Canadian National Railway CNI 1.73%
Berkshire Hathaway BRK.B 0.00%
Abbot Laboratories ABT 3.67%
Exxon Mobil XOM 2.36%
Compass Minerals CMP 2.45%

Average Portfolio Yield: 2.18%

Portfolio 2

Company Ticker Dividend Yield
Colgate Palmolive CL 2.70%
McDonald’s Corporation MCD 2.89%
Automatic Data Processing ADP 2.76%
Cincinnati Financial CINF 5.62%
Chevron Corporation CVX 3.11%
Novartis NVS 3.94%

Average Portfolio Yield: 3.50%

Portfolio 3

Company Ticker Dividend Yield
Intel Corporation INTC 3.91%
Phillip Morris International PM 3.89%
Realty Income Corp O 5.21%
Exelon Corporation EXC 4.93%
Johnson and Johnson JNJ 3.46%
Kinder Morgan Energy Partners KMP 6.38%

Average Portfolio Yield: 4.63%

Benefits of Ownership

The benefits of owning individual dividend stocks are many.

  • You keep yourself aware of business events and the economy.
  • You ensure that you become and remain financially literate.
  • You have a solid part of your portfolio in companies that you understand.
  • You derive passive income from investments across many sectors.
  • You get to vote in matters of those businesses.

Disclosure: I am long KO, ABT, XOM, CVX, and JNJ.

Source: 3 Model Dividend Stock Portfolios to Consider