HomeMost PopularA Deep Dive into a powerful Dividend Portfolio

A Deep Dive into a powerful Dividend Portfolio

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Time value of money, asset growth over time, financial concept : Dollar bags, sand clock or hourglass on a balance scale in equal position, depicts investment in long-term equity for more money growth

Solid Investment Strategy

Constructing a robust and extensively diversified dividend portfolio is crucial for long-term wealth creation.

In this article, I will reveal how you can assemble a widely diversified dividend portfolio that effectively combines both dividend income and dividend growth, all while increasing the likelihood of achieving positive investment results.

Symbol

Company Name

Sector

Industry

Country

P/E [FWD]

Dividend Yield [TTM]

Dividend Growth 5Y

Number of shares

Acquisition Price per Share in $

Total Acquisition in $

Current Price per Share in $

Market Value in $

Current Allocation

SCHD

Schwab U.S. Dividend Equity ETF

ETFs

ETFs

United States

3.53%

13.92%

13.3761

74.83

1000.93

71.34

954.25

43.52%

O

Realty Income

Real Estate

Retail REITs

United States

40.13

5.46%

4.28%

1.8185

55.54

101.00

54.05

98.29

4.48%

PM

Philip Morris

Consumer Staples

Tobacco

United States

18.52

5.38%

3.15%

1.0552

95.71

100.99

93.78

98.96

4.51%

RY

Royal Bank of Canada

Financials

Diversified Banks

Canada

11.65

4.49%

6.24%

1.0936

92.36

101.00

85.58

93.59

4.27%

AAPL

Apple

Information Technology

Technology Hardware,The Dividend Income Accelerator Portfolio: A Risky Business

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Rates [FWD]: Realty Income (EPS Growth Rate [FWD] of 20.49%), Mastercard (19.23%), Main Street Capital (13.59%), and BlackRock TCP Capital (12.89%).

Only three from the 12 selected companies have shown a negative EPS Growth Rate: AT&T (EPS Growth Rate [FWD] of -9.72%), Bank of America (-2.80%), and Royal Bank of Canada (-1.06%).

These metrics are a clear indicator of the companies’ commitment to providing shareholder value. It also serves as an additional indicator that The Dividend Income Accelerator Portfolio has a reduced risk level and therefore, an elevated probability of producing favorable investment outcomes.

Risk Analysis: The Dividend Income Accelerator Portfolio’s Diversification Across Companies/ETF

Presently, Schwab U.S. Dividend Equity ETF represents the largest position of The Dividend Income Accelerator Portfolio, accounting for 43.5%.

With a proportion of 5.26%, Bank of America represent the largest individual company compared to the overall portfolio, followed by Apple (with a proportion of 5.07%), and AT&T (4.99%).

The fact that the Payout Ratios of the three largest positions are significantly below 50%, further confirms my theory that this portfolio offers investors a reduced risk level: as shown in the previous chapter, Bank of America’s Payout Ratio stands at 25.21%, Apple’s at 15.36%, and AT&T’s at 44.76%, indicating a low probability of a dividend cut for the three largest positions of The Dividend Income Accelerator Portfolio.

The graphic below illustrates the portfolio allocation per Company/ETF:

Risk Analysis: The Dividend Income Accelerator Portfolio’s Diversification Across Companies When Allocating SCHD to the Companies It Is Invested In

The graphic below demonstrates the current portfolio allocation of The Dividend Income Accelerator Portfolio when allocating Schwab U.S. Dividend Equity ETF across the companies it is invested in.

I have carefully selected the companies below to ensure that none of the individual companies I have added are already part of Schwab U.S. Dividend Equity ETF. This ensures that the portfolio has a low company-specific concentration risk.

It is worth highlighting that even when allocating Schwab U.S. Dividend Equity ETF across the companies it is invested in, only Bank of America (with a proportion of 5.26%) and Apple (5.07%) account for more than 5% of the overall investment portfolio.

All other companies account for less than 5%, indicating a reduced company-specific concentration risk for investors of The Dividend Income Accelerator Portfolio.

It is also worth mentioning that all companies that currently account for less than 2% of the overall portfolio are indirect investments through the investment in Schwab U.S. Dividend Equity ETF. Please note that in the graphic below, only the current largest 20 positions of The Dividend Income Accelerator Portfolio are included (including 12 direct investments in individual companies and the 8 largest positions of Schwab U.S. Dividend Equity ETF).

Risk Analysis: The Dividend Income Accelerator Portfolio’s Diversification Across Sectors

The ETF Sector represents the largest sector of The Dividend Income Accelerator Portfolio at this moment in time, accounting for 43.5% of the overall portfolio.

The second largest sector is the Financials Sector, representing a proportion of 28.3%. This sector is represented by Bank of America (5.26%), BlackRock TCP Capital (4.77%), Mastercard (4.74%), Main Street Capital (4.69%), Ares Capital (4.59%), and Royal Bank of Canada (4.27%).

The third largest sector is the Consumer Staples Sector with 9.1%. The Consumer Staples Sector is represented by British American Tobacco (4.57%) and Philip Morris (4.51%).

The fourth largest sector is the Information Technology Sector, represented by Apple (5.07%), followed by the Communication Services Sector (represented by AT&T with 4.99%),

The Heath Care Sector (represented by Johnson & Johnson) accounts for 4.52% of the overall investment portfolio.

The Real Estate Sector (represented by Realty Income) accounts for 4.48%.

Beside the ETF Industry, only the Financials Sector accounts for a larger proportion of the overall portfolio (with 28.3%). All other sectors account for less than 10%, indicating a reduced risk level for investors. However, the Financials Sector accounting for such a large proportion of the overall investment portfolio does imply some sector-specific concentration risk.

ETFs (43.5%)

  • Schwab U.S. Dividend Equity ETF (43.5%)

Financials Sector (28.32%)

The Dividend Income Accelerator Portfolio: A Recipe for High-Octane Diversification

Spicing Up the Portfolio with Diversification

Geographical Blend: A Sip of Global Flavor

Equity Style: Brewing a Low-Risk Elixir

The Unleashed Potential of the Dividend Income Accelerator Portfolio

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