diversified-stock-portfolio

Our Stock Portfolios

Creating a Diversified Stock Portfolio that Meets My Goals

The Plan: Accumulate a balanced mix of quality dividend paying equities using my wife and I’s IRA’s.

Let’s face it…Social Security will just not be enough to live on. We have to produce multiple sources of income!

I recently discovered Coca-Cola is a Dividend Zombie. There are eight Companies on the list. They are Zombies because nothing can kill them. They have given Over 100 Years Of Uninterrupted And Undiminished Dividends to their shareholders.

The Dividend Zombie List

Consolidated Edison 1885 4.1% 184.3%
General Mills 1898 3.3% 174.3%
Proctor & Gamble 1891 3.1% 169.6%
Exxon Mobil 1882 3.0% 142.0%
Coca-Cola 1893 2.9% 182.9%
Stanley 1887 2.5% 206.6%
Colgate Palmolive 1895 2.3% 182.9%
PPG Industries 1899 1.4% 342.7%

The Dividend Zombies is a list of 8 companies that has a history of sustaining dividend payouts at uninterrupted and undiminished rates for over 100 years. Each of these has proven unstoppable, standing against 262 wars of the 20th and 21st centuries (including two World Wars and sundry regional wars), the global Influenza Plague of 1918, all the great famines of the modern era, and outlasting the span of birth to death of virtually everyone that was born at the start of these remarkable unbroken dividend chains. Nothing seems to be able to kill them.

It is often said that past performance is no guarantee of future performance. In this case, I beg to differ. These companies have proven they will stand up against any return of the 4 horsemen, be it a new Central European War, the Global War on Terror, a nuclear Iran, the AIDS epidemic, a global Ebola pandemic, or new famines from climate change. These stalwarts have the right to make the claim that you can rely on them and their dividends throughout your entire lifetime. If you are an income investor, all 8 of these companies should be in the core of your core portfolio.

I will even go one step further and proclaim that if you are any kind of investor, at least 5 of these belong in your core holdings; anything less marks you as a speculator. I am embarrassed to say they are not all in my holdings yet, but they will be soon.

The Dividend Zombies is not the end of it all. There is also the list of Dividend Aristocrats (sometimes referred to as Dividend Champions). This club is comprised of those who have raised dividends in each of the past 25 years. Oliver Pursche, writing for Forbes, narrows that list down to 18 Uber Aristocrats, which have boosted dividends each of the past 25 years while also lowering their payout ratio. The Dividend Kings is a list of 15 companies that have paid rising dividends for over 50 years.

I’m currently following two portfolio strategies in one of my Fidelity IRA’s.

The High-Yield Dividend Champions Strategy (*) picks the best 10 companies from the Dividend Champions list, and the Dogs of the Dow Strategy (+) picks the 10 highest yielding Dow stocks.

My goal is to own shares in 15 or 16, out of the 20. When a holding gets to a profit margin I feel is adequate (1% to 20%) I sell and buy another. I only sell at a profit and I only sell when a stock that is on these lists (that I do not own) is a good buy and has a majority “BUY” opinion from analysts.

P1 is my IRA and P2 is my wife’s.