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Start Your Own Dividend Fund and Beat the S&P 500

Here's the full Dividend Stars Portfolio, which offers a dividend yield of 2.77%

Mattel (MAT), dividend yield 3.20%
Pepsi (PEP), dividend yield 3.20%
Exxon Mobil (XOM), dividend yield 2.4%
Novartis (NVS), dividend yield 3.5%
Target (TGT), dividend yield 2.3%
Norfolk Southern (NSC), dividend yield 2.30%
Chubb Corp (CB), dividend yield 2.30%
Microsoft (MSFT), dividend yield 2.90%
Intel (INTC), dividend yield 3.4%
Deere (DE), dividend yield 2.20%
McGraw Hill (MHP), dividend yield 2.3%
Honeywell (HON), dividend yield 2.7%
Procter & Gamble (PG), dividend yield 3.3%

I will be providing further commentary on these companies over the next several weeks, along with commentary on performance and company updates. Today will mark the official "buy"/start date of this portfolio.

To see the 13 stocks in action, you can check out the Dividend Stars Portfolio on Stockpickr.

Here are the criteria for assembling the stocks in the Dividend Select screen:

¿ Dividend yield for the stock must be greater than that of the S&P 500.

¿ Stock must have a "buy" recommendation, based on ratings from TheStreet Ratings.

¿ Financial strength: According to our model, stock must have moderate financial strength and the ability to meet overall debt requirements.

¿ Return on capital: seeking companies with above-average returns over time.

¿ Dividend payout ratio is less than 60%. This will eliminate REITs and MLPs, which are required to pay out a majority of their earnings, and will look for companies that have the capability to invest in the business or new acquisitions.

If you have any questions, comments or suggestions, feel free to message me on Twitter at @bostoncfa

To get more stories like this one, sign-up for TheStreet's free Dividend & Income newsletter. Also, check out our Monthly Dividend Portfolio, which yields 2.71%.


Equity research manager Chris Stuart, CFA, joined TheStreet Ratings after working as a senior investment analyst with Merrill Lynch covering small-cap equity and alternative investment strategies. Prior to that, Stuart worked for One Beacon Insurance as an actuarial analyst and at H&R Block as a financial adviser. Stuart earned his bachelor's degree in finance from the University of Massachusetts, Amherst. He holds a Chartered Financial Analyst (CFA) designation and is a member of the Boston Security Analysts Society (BSAS) and the CFA Institute.
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INTC $32.00 6.38%
MAT $22.61 -0.64%
MSFT $40.97 -0.58%
PEP $95.95 0.33%
PG $82.31 0.19%


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S&P 500 2,061.02 +4.87 0.24%
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