This my dividend portfolio PIE. Made with a longterm strategy for about 30 years + long. The main plan is to pick good value, dividend paying stocks which pay solid, stable and growing dividend. Gonna invest everyweek in this pie, as time on the market gives more value and profits. Additionally all cash from dividends, at least for now also will be reinvested. The average Dividend Yield is around 3% which is quite good in my opinion. There are few a lil bit risky picks like INTC and XOM, however fundamentals in both of them are very strong for me, therefore I see big upside in the future.
Generally speaking it looks like a solid portfolio. For me personally, allocating a few more percentages in MSFT, AAPL and KO might be a better way of spreading. As for specific stocks, I feel like there are far better options than Pfizer and Exxon in their industries. To name a few (BMY, MRK, RDS.B,PBA)
As of PFE, I know the company and its products very well the other two arent so diversified. PFE has lots of good drugs in different sectors of medicine while just few products of MRK and BMY cought my eye.
As i said XOM, INTC and T are rather more ‘riskier’ options for me, as for the oil prices stabilizing near 55$ could give XOM a nice deep breath of fresh air. We will see what future have for us
Always open for a constructive critics and discussion
Same for T as their are moving more to subscirber option with HBO GO MAX and WarnerMedia premiers being avaible on their platform on same day as in cinemas, which in my opinion will give more reliant stream of cash flow. Do not forget about 5G!
INTC is spending tons of money for research, far far more than anyone in the chip industry and I believe they will sooner or later succeed.
Anyway if any of these stocks will stop paying out dividend or cut it drastically i will probably sell it.
100% agree with the INTC take. I myself own a fair amount of shares and have been picking more recently. For T I am currently holding my position for the dividends, but their future prospects are not clear for me. With this dead weight in Direct TV + the big competition that they face in the streaming world, the company does not look promising. However, with 5G and a possible sell of DirectTV, I might change my position in the near future, for now holding it is
How many of those companies do you think will still exist in 30 years time? Your best off managing your portfolio in 2,3 or 5 year segments.
This way you can review profits, swap and change companies as and when.
A set and forget strategy will not work over such a long period and you may find more than one disappear from your investments
To be honest this is kinda hard question. For now I believe in all of these stocks and I hope they will stay on the market for 30 years or longer, growing and expanding more and more. However I cant predict the future and problably noone can. This is why i rebalance or change my portoflio every quarter as said above.
For example predicting future for Microsoft/Apple nowadays when technology changes so quickly is nearly impossible. Why? God knows, maybe Nokia will invent something more simple and more optimal to use and they will conquer mobilephone market again? or maybe some other software company maybe Linux will make their software for computers more usefull and much more simplier and more compatible with eveyrthing around IE: New nokia mobilephones… and boom microsoft and apple are going to dust? Will it happen? Who knows? Is it possible - YES it is.
Thats why I think adapting to current situation and making changes should be done every 3 months.
Im thinking about changing CVS health corp to something else. Today they made announcement that dividend stays at 2$ per year which dissapointed me, therefore im looking for any other option from a healthcare sector.
I got few stocks on my eye like: BMY, MPW or MRK any other ideas guys?
I have ABBV and JNJ in this dividend pie. Ive recently analised AMGN, BMY and MRK. Final decision was BMY. They have lots of products in final stage of clinical trials so there is huge potential. UNH will be on my watchlist
To continue from the other thread, it’s indeed true that dividend-paying stocks and dividend growth stocks outperform non-dividend-paying and dividend cutting stocks:
From my own research so look for other sources as well:
But a large part (if not all) of that overperformance could be explained by the Fama and French 3 factor model meaning that those stocks had higher exposure the factors from the model (mostly value though I found).
Only a small amount of the outperformance of dividend growers wasn’t explained by this model, meaning that there might be other factors (would have to look at other factor models) which do explain the unexplained performance or dividend growing stocks have ‘something’ which results in higher returns. I would qualify this ‘something’ as management vision/strategy difference resulting in longer-term decisions resulting in better performance. This last part though should be researched further.
Back to regular research:
But you do reduce diversification as you exclude all non-dividend paying stocks, I mean with this that value stocks also could deserve a place in the portfolio even if they don’t pay a dividend but still have good fundamentals. I also have mostly dividend-paying/growing stocks in my portfolio but not exclusively.
Edit:
This might also be something people here are interested in:
I also love ABBV, JNJ and BMY but why did you decide against MRK? I think the valuation on it is reasonably attractive at current prices (based on dcf), I don’t know too much about pharma so I’m interested in what you have to say
Just by checking Div Aristocrats we can see some interesting info . Out of 65 stocks
13 are Industrial sector,
11 Consumer staples,
8 Consumer Discretionary
7 Financial (however there are diversified banks, regional banks, financial data and insurance companies all togheter)
6 Healthcare
6 Basic Materials
2 Energy
2 Technology
1 REIT
We can see easily which sectors are most ‘safe’ or rather ‘defensive’. During recession Real Estate, energy/oil companies and banks take the biggest hits. Why? Simply because people cut their spending dramatically. They tend to spend less on some extra pleasure stuff like going out to cinema, getting a new car, travelling around the worlds (oil companies) and surely they dont buy new houses/flats (Real estate). Companies during recession make less acquisitions and investments - they take less loans/credits (banks). Technology gets obsolete very fast nowadays. All we care during recession is our Health, some food to eat and basic household products which seems about to be right with these statistics above.
For me the key to this success is a lil bit sophisticated but also its simple. Most of Aristocrats simply have a very good cashflow balance, HUGE advantage over others in their sector/niche and Very nice margins. This give them a nice position at the beginning of recession. For example Coca-Cola can change the price of a bottle by 0,01$ and this will make an ENORMOUS BOOST in their finances.
Moreover as Graham said in Inteligent Investor (if i remember well) most of the profits during inflations times came out from dividends 30-40%. Stocks didnt move much during that period but dividends made a huge difference.
Coming back to Healthcare sector. I work in hospital and i know most of the products from JNJ, PFE, ABBV, BMY and MRK. If I could i would buy all of them, but as i am doing my investments step by step. Im going to add MRK later, probably during next rebalancing. Especially with all new data about Ivermectin and COVID. I must admit that healthcare is a really good, stable and safe sector, as all of us primarily care about our Health plus i know a lil bit about it haha
here is graphic I found some time ago. I think no comment is needed here
As of diversification. I am diversified outside this Dividend PIe. I hold some uranium stocks, some oil stocks (as shown above) some gold miners, some cannabis stocks and i got huge position on my local emerging market. Must admit that most of those stocks are good 10year+ dividend payers however i got few ‘growth stock’ positions. Plus i hold piles of cash on sideline and waiting to make a move.
So overall i think im kinda well diversified for the upcoming uncertain times with probably huge inflation or interest rates at 0.00 for next 3 years as FED said some time ago.
