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.
I made one change to the screen methodology for 2016 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, stocks are ranked on yield, P/E, and 3-year dividend growth rate, but payout ratio is no longer a factor. The modification has a relatively low impact on screen results.
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 25 stocks using the new method are below and displayed in order of their overall ranking (figures are June month-end):
|Helmerich & Payne Inc.||HP||4.17||68.50||114.15|
|Eagle Financial Services||OTCQX:EFSI||3.49||11.57||3.10|
|Old Republic International||ORI||3.89||12.61||1.39|
|Community Trust Bancorp||CTBI||3.58||12.88||2.25|
|T. Rowe Price Group||TROW||2.96||15.59||15.21|
|Eaton Vance Corp.||EV||3.00||16.83||9.18|
|Archer Daniels Midland||ADM||2.80||16.50||16.96|
|Altria Group Inc.||MO||3.28||24.81||8.36|
|Weyco Group Inc.||WEYS||3.02||17.36||6.18|
|United Bankshares Inc.||UBSI||3.52||18.94||1.06|
|Bowl America Class A||BWL.A||4.76||39.72||1.78|
|Universal Health Realty Income Trust||UHT||4.55||31.08||1.47|
|Wal-Mart Stores Inc.||WMT||2.74||16.15||7.78|
|Computer Services Inc.||OTCQX:CSVI||2.67||18.12||21.05|
|Procter & Gamble Co.||PG||3.16||28.32||5.99|
There is turnover in two long-term holdings this month. Chevron, a holding since December 2012, will be sold for a small capital gain of .37%. ExxonMobil, a holding since April 2013, will be sold for a capital gain of 4.55%.
The proceeds will be used to purchase Community Trust Bancorp and T. Rowe Price Group. Questar is in the midst of a pending merger with Dominion Resources (NYSE:D), so I am excluding it from eligibility for purchase.
The current portfolio is below:
|Position||Average Purchase Price||Initial Purchase Date||Current Value||Percentage Gain/Loss Excluding Dividends|
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.