The Wanderer Dividend Portfolio just turned one. It was a risky time to begin a long-term dividend portfolio, but we believed that the March '20 coronavirus induced market drop presented an investing opportunity for beaten down stocks. Even if they weren't able to quickly recover, the belief was that a majority of them would be able to continue paying their dividends, which at these levels had offered up some incredible yields—yields which Wanderers could use to create a steady income stream regardless of stock price performance.
While our first trade for the dividend account was made on March 9th, we didn't fully allocate the $20,000 portfolio until November. We also made a semi-annual deposit to the account of $2,000, bringing the total up to $22,000 invested. This is what makes these returns all the more impressive. The numbers tell part of the story, but they also leave you with the assumption that the return was made on money that was invested from day one, when in truth, for much of the year only a portion of our total assets were invested. We built the account slowly, grabbing opportunities when we found them, and we think we've built a great, well-balanced, high dividend yield account.
So, a year later, where do the numbers stand?
$11,068 stock price gains
$1,422 dividends received
Total Return 56.8%
The dividends received in year one equate to 6.4% of the $22,000 invested. However, that doesn't tell the whole story. Because this account was built up throughout the year, this number is low—we only received a portion of the dividends we would expect in the coming year with a fully invested account. Our current true dividend yield is close to 8.4%, and we expect that number will increase a bit this year as these companies have recovered their COVID losses, and many are now trading at new highs, which should result in a few of them increasing their dividends.
While one year returns are no guarantee of future results, it's certainly been a great way to start out. We expect stock price returns will slow from our year one pace, but dividend yields and income will increase. As high dividend income is the true goal of the portfolio, this is a great development for us.
We look forward to continuing to build this account with semi-annual deposits which will allow all of our subscribers, old or new, to participate—$20,000 initial investment, $2,000 semi-annual deposit (adjusted accordingly for your own investment needs).
ARR is a real-estate trade. REITs are strong dividend payers, as by law they are required to return a certain amount to shareholders. This was our first purchase for the dividend account, and came about one week too early. However, the stock has been recovering steadily. Currently it is down 33%, but is breaking out of another period of consolidation, and is also paying its monthly dividend, which currently stands at 10 cents/share. The stock would be a buy here at current levels, with an annual dividend yield of 9.8%. If it continues to climb, as we suspect it will, the dividend will be increased, thus raising the yield even further. BUY
We bought Atlantica at an 8.2% dividend yield level. The stock really launched in January before falling back when all green energy got hit in February. However, the stock is still up a whopping 82%. Dividend yield for buyers at this level are about 4.5%, which is great for those of us who bought at the lows, as it leaves plenty of room for yields to increase in the future. HOLD
This trade was made the same day as ARR, also about a week early. It's taken a while to recover, but is now up 12%. This pays a monthly dividend and we expect that it will slowly be raised again as the stock continues to recoup the COVID drop losses. Current dividend yield is 4.9% but will jump significantly with a 1-2 cent dividend increase. The chart is breaking out nicely here, and we're bullish on the sector. BUY
Banks don't normally seem very exciting, but Canadian Imperial Bank has a long history of paying dividends, and by taking advantage of the drop we now have a 69% stock price gain. The bank has continued to raise its dividend since our entry and we are now earning a 7.8% yield on it. This is incredibly high for anything as low risk as a bank stock. HOLD
Dow is our biggest star, up 110% and paying us a 9.4% dividend yield. The company never lowered their dividend on the market drop and continues to pay out a nice dividend, although at these stock prices the yield is 4.4%. It's breaking out above the pre-COVID highs now and is a solid buy for those happy with a lower dividend yield. HOLD
LEO is up 31% and is paying us a 6.5% dividend yield. It's not exciting, but it's paid its dividend monthly without change for over three years now. Like with DOW, this could still be a buy for those okay with a slightly lower yield, currently at 4.9%. HOLD
MSB is up 95%, on a strong uptrend in a sector that we love right now. The dividend isn't a steady amount each quarter, which makes calculating the yield a little tricky. Using the prior 4 quarters total, we are receiving 9.7%. It's hard to imagine a better spot to be in than to be up nearly double on a high dividend yield stock. This one has a high likelihood of raising their dividend payment in the coming quarters, further increasing our yield substantially. The current yield if you were to buy the stock now is 5%, which along with a strong chart, and the possibility of dividend increases, probably still represents a good buy. BUY
We bought this one very near the bottom, with a 6.8% dividend yield, and are currently up 113% on the stock itself. With a bullish commodities outlook we still feel this stock has significant upside. With a yield close to just 3% at these levels, unfortunately, it's no longer a buy for those not in already. HOLD
AT&T continues to struggle to get going, sitting right at 0% for us (though we have collected over 5% in dividends). We believe this has a lot of upside potential, and that the 7% dividend yield keeps it a buy right now. BUY
The cannabis sector is set to have a breakout couple of years with the growth of decriminalization. MJ saw a huge spike in February before coming back to earth a bit. We are currently up 76% with a trailing 12-month dividend yield of 5.1%. Long-term we think this could turn out to be one our best performers both in stock price and yield (as the dividend continues to grow). For dividend buyers the yield of just 2.7% at the current stock price doesn't make sense to buy. HOLD
This oil sector stock is up 49%, and has been paying us a dividend yield of a whopping 20.5%. Of course, high yields come with high risk. We picked this one up once it appeared the worst was over for the sector. We're now quite bullish on the sector, and will happily continue to collect these healthy dividends. In February the company did announce they were cutting the dividend a bit in order to fund some expansion. The stock was hit hard for a couple of days on the news, but quickly recovered those losses and went even higher. Based on forecasts, our dividend yield going forward will be 15%. If the stock continues to outperform, this is a small price to pay. At current prices, the stock's dividend is yielding 10%. BUY
Another oil sector stock that we caught as they came out of the lows. The stock is currently up 74% and our dividend yield is 18.1%. While this sector is always a risk, the cushion we have built, along with the astronomical yield, makes this a great hold for us. At current levels the yield would still be a strong 9.7%, and seeing as we remain bullish on the sector is likely still a buy. BUY
NHI is another REIT, this one specializing in senior housing and medical properties. We believe this sector will continue to perform well in the future. This was our most recent purchase, but is already up 10%. Our dividend yield is 6.7%. The chart remains strong here, breaking out through recent highs, with a lot of upside potential. BUY