As part of our consulting business and as a friend, I have been working with my neighbor, who we will call John from herein, for approximately 6 years now. I have obtained his permission to make this information available to everyone here. John is an average individual with a liquid net worth in the range $400,000, 2 kids, a slightly above average home, and in his 60's.
John recently asked me to help him put together a small portfolio for some income to supplement his retirement. These are the companies I thought would be a good match and generate a sizeable yearly return with a relatively low amount of risk. The total yearly return based on dividends and distributions is 6.68%.
This portfolio was designed to generate dividend/distribution income while being invested in relatively price stable companies. Coupled with the return that this portfolio offers, it also provides some good diversification. We have the energy, financial services, telecomm, renting and leasing, private equity, and technology. Most of these firms have a price to cash flow ratio of less than 5 representing a high ability to pay their dividends. The only risky investment in this portfolio I believe is ARR and that is why I allocated only 5% to the REIT.
|Company||Ticker||Price||Ann Dividend||Payments Per Year||% of Portfolio||Ann. Yield for Portfolio|
|New York Comm Bank||NYB||$12.00||$1.00||4||12%||1.00%|
|Permian Basin Trust||PBT||$21.80||$1.42||12||12%||0.78%|
|KKR & Co||KKR||$11.50||$0.76||4||12%||0.79%|
|Seacube Container Leasing||BOX-OLD||$12.46||$0.96||4||9%||0.69%|
|Bank of NY Mellon||BK||$20.70||$0.52||4||10%||0.25%|