Jonas Elmerraji recently identified a slew of dividend-payers which boosted their dividend payouts in spite of the current broad market selloff. This is a recurring theme and a platform from which to select some stocks.
- Monsanto (NYSE:MON) is one of the biggest suppliers of seeds and herbicides to commercial farmers
- Illinois Tool Works (NYSE:ITW) has more than 800 operating units in 57 countries
- CF Industries Holdings (NYSE:CF) a $11.7 billion fertilizer company
- Dover (NYSE:DOV) is a $10 billion conglomerate whose business units are numerous and autonomous
- Microchip Technology (NASDAQ:MCHP) is a powerhouse in the microcontroller business
- Harris (NYSE:HRS) provides communications products -- everything from military and police tactical radios, and communications solutions for oilrigs
- Eastman Chemical (NYSE:EMN) was originally started to supply photo chemicals, this stock has grown to become a major supplier of chemicals used to make adhesives and coatings, as well as plastics and fibers
It is important to point out that Jonas does not uniformly recommend all of these equities and to read his article carefully. However, this is a different set of equities that don't often get referenced and so it is worth measuring their performance to see whether this is a group that is worth tracking. It is a diverse group in product areas that may ride out a downturn reasonably well.
We will compare these companies with our benchmark set of dividend ETFs that are well diversified.
The benchmark ETFs are:
|Asset||Fund in this portfolio|
|REAL ESTATE||ICF (iShares Cohen & Steers Realty Majors,|
|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,|
- 7 Dividend Stocks Pumping Payouts As The Summer Ends -- Total of $10K invested equally in each stock
- Retirement Income ETFs Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes,
- Retirement Income ETFs Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum,
|Portfolio/Fund Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Retirement Income ETFs Tactical Asset Allocation Moderate||9%||81%||11%||85%||10%||69%|
|7 Dividend Stocks Pumping Payouts As The Summer Ends||59%||202%||4%||8%||22%||55%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||11%||76%||5%||22%||4%||16%|
The returns in the short term and long term are good but, looking at the graphs, the portfolio dips precipitously in turbulent times which isn't the behavior we were expecting or looking for. I note below that one company ends up dominating the portfolio holdings and so a rebalance could be important.
It is important to note how dominant the fertilizer company CF Industries Holdings is in the portfolio, which gives cause for concern as it is the main returns driver.
I like the theory but I don't like the cliffs we see in a couple of places. This is a portfolio to track and see what happens.
For now, I'm sticking with the diversified set of ETFs.
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.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.