Dividend Champion Portfolio - February Update

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Includes: ADM, CVX, EFSI, EMR, EV, HCP, HP, MDU, MO, ORI, STR, TGT, UVV, WMT, XOM
by: Scott's Investments

The High Yield Dividend Champion Portfolio is a publicly tracked stock portfolio on Scott's Investments. Its goal is to capture quality high yield stocks with a history of raising dividends.

The screening process for this portfolio starts with the "Dividend Champions" as compiled by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years.

For 2016, I made one change to the screen methodology in order to further simplify the process. Stocks from the Dividend Champion list were previously ranked on yield, payout ratio, P/E, and 3-year dividend growth rate. In 2016, the stocks are ranked on yield, P/E and 3-year dividend growth rate. Payout ratio will no longer be a factor. The modification has a relatively low impact on screen results.

The stocks will still be sold on the re-balance date (generally around the 5th of the month) when they drop out of the top 15 (to limit turnover), and are replaced with the next highest-rated stock.

The top 15 stocks using the new method are below and displayed in order of their overall ranking (the figures are as of January month-end):

Name Symbol Yield
Helmerich & Payne Inc. HP 5.41
Emerson Electric EMR 4.13
Questar Corp. STR 4.12
Chevron Corp. CVX 4.95
Eaton Vance Corp. EV 3.7
Exxon Mobil Corp. XOM 3.75
Archer Daniels Midland ADM 3.17
MDU Resources MDU 4.44
Old Republic International ORI 4.09
HCP Inc. HCP 6.4
Universal Corp. UVV 3.87
Universal Health Realty Trust UHT 5.08
Altria Group Inc. MO 3.7
Target Corp. TGT 3.09
Eagle Financial Services OTCQX:EFSI 3.44
Click to enlarge

There is turnover this month in one position. Wal-Mart (NYSE:WMT) has been a holding since October 2015 and will be sold for a gain of 1.99%. The proceeds will be used to purchase Eaton Vance. A small portion of the of the WMT sale will also be used to rebalance the portfolio's position in HP by purchasing an additional 20 shares.

The current portfolio is below:

Position Average Purchase Price Initial Purchase Date Percentage Gain/Loss Excluding Dividends
CVX 103.1835 12/6/2012 -19.69%
EMR 49.64 8/4/2015 -5.50%
ORI 16.22 4/4/2014 8.51%
EV 28.38 2/5/2016 0.00%
ADM 35.41 12/7/2015 -3.78%
MO 58.14 1/7/2016 2.86%
XOM 89.01 4/5/2013 -10.03%
HP 87.4457 10/6/2014 -42.50%
STR 22.8 3/6/2015 9.34%
TGT 73.39 12/7/2015 -5.22%
Click to enlarge


Disclosure: None.