This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dividend stocks deliver for the portfolio

By Raymond Stoudt

By the end of June, 2014, I will have completed 4 years as manager for the Innovative Companies Portfolio. Here's an update on the strategy's holdings.

As of June 6th, 2014, the portfolio held 13 stocks. They include Cypress Semiconductor (CY), VMWare (VMW), Intel (INTC), EMC, Oracle (ORCL), Charles Schwab (SCHW), Cisco (CSCO), SunPower (SPWR), Calix (CALX), Qualcomm (QCOM), Microsoft ( MSFT), NVIDIA (NVDA) and Limelight (LLNW).

Nine of the thirteen stocks pay dividends. As a result, the portfolio receives at least some dividend payments every month of the calendar year. Unless I can find a new stock with these kinds of dividend characteristics, I will usually add to my existing positions in the portfolio.

The timing of most purchases depends on how much cash is available and the technical market condition of the particular stock. At this time, Cypress is the highest yielding stock at about 4.1% (dividend initiated in July 2011); it is also the largest position in the portfolio at nearly 32% and has been in the strategy since inception.

The top five stocks account for 77.5% of current market value. This allocation is within the parameters stated in the strategy allocation description. Of course dividends are not guaranteed, but aside from that the current investment capital of the portfolio is producing a yield of around 2.6% annualized. Although not an original goal of the strategy, the receipt of a monthly dividend is proving to be beneficial.

The portfolio's statistics for the average number of trades per month clearly shows that I do not trade very often. In fact, I have bought more than I have sold in the past four years.

Six of the transactions were short-term capital gains, and the other two transactions were long-term capital gains. Also, two of the short-term sales involved companies that were acquired and I sold shortly after the announcement near the takeover price. One such deal involved Sourcefire (FIRE), which was acquired by Cisco (CSCO). To date, there have been no realized losses in the portfolio, though there is no guarantee that will continue.

The fact that I have not made many transactions seems to imply a ‘Buy and Hold’ strategy for the portfolio, though that isn't my primary intent. I do prefer to recognize long-term tax gains, and that is the major reason for limiting trading. The portfolio is currently technology-focused concentrated. However, I am always open to new ideas in any sector of the economy.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 0.00%
FB $118.06 0.00%
GOOG $695.70 0.00%
TSLA $222.56 0.00%
YHOO $36.00 0.00%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs