"Those are two banks that grow dividends well over 100% this year," Newhall says.
Among the top VDIGX holdings are Automatic Data Processing (ADP) (with a dividend of $1.44 and yield of 2.80%), Exxon Mobil (XOM) ($1.88/2.4%), Pfizer (PFE) ($0.80/4%), Pepsi (PEP) ($2.06/3%), Medtronic (MDT) ($0.90/2.4%), Western Union (WU) ($0.32/1.6%), IBM (IBM) ($3/1.8%), Cardinal Health (CAH) ($0.86/2%) and Johnson & Johnson (JNJ) ($2.38/3.4%).
Colgate-Palmolive (CL) (with a dividend of $2.32 and yield of 2.7%) "is one we consider a stalwart of the fund," Newhall says. "Colgate is such a great example because you look at it now and, on a run-rate basis, its dividend should increase this year about 14% and this is the 48th consecutive year of dividend growth. We'd love to fill the portfolio with 50 companies like that."
SDIV maintains an underlying focus on diversity. It has a multi-national selection of 100 companies, each equally weighted."The expectation going in is that we would see a lot of concentration in financials and utilities," del Ama says. "When we came back with their list of the top-paying companies we found that we had a ton of consumer companies. We have a pretty broad range of companies." REITs comprise 22% of the portfolio, followed by consumer discretionary (16%), telecommunications (16%), financial services (10%), utilities (8%), banks (5%), consumer staples (5%), energy (5%), industrials (5%), insurance (3%), technology (3%) and health care (2%). International company and currency holdings break down among the U.S. (32%), Australia (24%), Great Britain (10%), Canada (6%) and Singapore (4%). The equal weighting "materially diminishes the risk of any one company cutting or significantly decreasing their dividends if the get into financial difficulty," del Ama says. A key selection criteria for both funds is not just current yields, but companies that have the ability to grow that yield.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV