At the beginning of the year, I pulled together 32 dividend stocks to pick in 2012. They were named the 2012 Best Dividend Stocks in my free eBook. It’s always fun to throw predictions on the table, but I think it’s even more important to follow them throughout the year. This is what I did after the first quarter (you can read my update here). At that time, I was outperforming both US and Canadian markets with my picks. I had a few top scorers that were making the bulk of my yield. If you think that dividend stocks don’t swing, you will be surprised after looking at this Q2 update!
Let’s Start With The Numbers
I’m presenting both charts right away with results after 3 and after 6 months (data as at July 11th). I’ve also added a dividend yield column. The dividend yield is in reference to the current distribution from Google Finance (check other Top Stock Research Websites on my blog). I’ve taken the S&P 500 index and the TSX 60 as reference. I know I could have picked dividend ETFs to compare only dividend stocks amongst each other but I wanted to see how dividend stocks perform against the overall markets. In other words; should you look at dividend stocks when building your portfolio?
Best US Dividend Stocks
Company Ticker 3 months 6m (Jul 11th) Dividend Yield
Avon Products Inc AVP 10.82% -11.28% 5.94%
AT&T T 3.27% 16.60% 4.99%
Black Rock Inc BLK 14.96% -1.74% 3.43%
Chevron Corp CVX 0.76% -1.46% 3.43%
Conoco Phillips COP 4.30% -25.40% 4.86%
Flowers Food Inc FLO 7.32% 19.02% 2.83%
Garmin Ltd GRMN 18.01% -7.96% 4.91%
General Mills Inc GIS -2.37% -3.16% 3.37%
Hasbro Inc HAS 15.15% 4.99% 4.30%
Harris Corp HRS 25.07% 12.43% 3.26%
Intel Corp INTC 13.93% 4.70% 3.31%
Johnson & Johnson JNJ 0.57% 3.54% 3.59%
Lockheed Martin Corp LMT 11.08% 7.34% 4.61%
Microsoft Corp MSFT 24.25% 12.87% 2.73%
PepsiCo Inc PEP 0.00% 5.70% 3.07%
Procter & Gamble PG 0.75% -7.96% 3.66%
RadioShack Corp RSH -35.93% -59.84% 12.82%
Seagate Technology PLC STX 64.35% 54.70% 3.94%
Sunoco Logistics Partners LP SXL -4.04% -3.27% 4.49%
Wisconsin Energy Corp WEC 0.63% 15.22% 2.98%
Waste Management Inc WM 6.87% -3.41% 4.50%
Average 8.56% 1.51% 4.33%
S&P 500 6.67% Total 5.84%
After they announced that their Q2 and Q3 results would be impacted, ConocoPhillips (COP) lost about 25% in a single week. After showing a positive return of 4.30% (+ dividend) after three months, COP is now down by more than 25% since January 2012! This was a hard hit on this virtual portfolio. Radio Shack (RSH) was disputed by many readers when I first picked this stock. I can’t blame them today! The stock is now down 59%! After seeing its stock surge on a potential offer to purchase the company by Coty, Avon (AVP) dropped as the deal fell through. This is how we went from +10% to -11% in a single quarter. These were the worst three picks I have had so far.
Fortunately, I also have several good picks! Seagate Technology (you can read my STX stock analysis here) is still up by 54% and we should see the stock continue to climb. The P/E ratio is low and the profits are stable. I definitely think that STX is a good pick. Wisconsin Energy (WEC) surged by 15% in just three months. Good news, strong results and reaffirmed guidance for future quarters contributed to push WEC a little higher. This stock is on a steady uptrend since… 2009! AT&T (T) is another stock that went from +3% to +16% in only 3 months.
When I compare my overall portfolio, I don’t beat the index. At best, I’m showing a 5.84% return including the dividend yield. The S&P 500 is showing a 6.67% before the dividend yield! The interesting part is that if I take out my Big Miss (RSH), I beat the index! This is to show you the importance of not gambling on a stock and turning to more stable values. Overall, I’m still confident that my stocks will rebound and I’ll be able to match the index (as long as I don’t get another big miss!).
Best Canadian Dividend Stocks
I have fewer Canadian stocks but they performed well over the first two quarters. The interest for telecom has risen during the last quarter. As the Canadian economy is going sideways due to the slowdown in energy and resources demand, more stable industries saw their shares head upward. BCE (from -5.96% to +0.05%) and Telus (T) (from 0.42% to 7.96%) both showed good financial results. The difference between my US and Canadian portfolio is that I don’t have a any stocks that tanked. My worst pick is IGM at -11% which is not too bad considering the overall market.
As the TSX 60 dropped by 3.43% since January, my stocks are up 3.88% before dividend. The overall dividend yield is at 4.45% which is even more than the capital appreciation. This portfolio shows great stocks in good financial positions. I don’t expect any big surprises for the rest of the year.
As you can see, it’s not that easy to predict the future. Overall, I’m still pretty happy about my picks since both portfolios are showing positive results in a very hectic stock market. Once again, the dividend yield plays a big role in the investment return!
If you want to learn more about dividend investing, you can download my free eBook here: Dividend Investing.
Disclaimer: I own shares of CVX, INTC, JNJ, STX, NA & T (Telus)
Would this be a good time to pick up a few shares of COP? I’ll check them out today.
@Joe,
I think you might be right :-). After such a slump, the stock will surely go back up once the oil price goes up. The problem is that with a shaky economy, it’s hard to tell when the oil barrel will hit $100 again. I’m already invested in CVX and HSE so I won’t add any other oil stock to my portfolio for the moment.
COP actually split into 2 different stocks back in May.(COP & PSX) That is why the stock is down 25%. In reality its almost flat From Jan 1st on adjusted basis. The interesting part of it is the dividend, despite the split the COP div stayed at $2.64 increasing the yield.
Hello Pat,
I saw that too but everywhere I’ve looked (Google finance, Globeinvestor), the ytd is down. They usually readjust it not long ago after the split, right? can you tell me on which site you get the correct information?
thx!
Hey Mike,
have you considered a stock like Cineplex Inc? (cgx on the TSE), I purchased some in June 2010 and haven’t bought more since but they’ve provided a nice little dividend paid out every month since I purchased, and have gone up about 15% for me excluding the dividends. I’ve been dabbling here and there in a separate RRSP & TFSA, managing my own equities and would be interested to know your thoughts. Great website btw, spent a few hours this evening reading through some old posts and it has gotten me excited to maybe have a more serious look at my self managed investing.