The Dogs of the Champions Portfolio

Our studies have established that the Dividend Champions are a high-quality group of dividend stocks. But valuation is just as important as quality. We want to buy the undervalued Champions, not just any Champion. Using the same theory that is used for the Dogs of the Dow (https://www.dogsofthedow.com/), We believe that buying the highest yielding Champions would give better results than simply buying all the Champions. And you would only have to buy 20 stocks, not 130+. A back test to investigate this showed that buying the 20 highest yielding Champions, from 2008 through 2018 produced an annual return of 10.45%, whereas the full Champions list produced a return of 10.18%. Over the same time period the Dow Jones Industrial Average returned 7.61%.

When selecting stocks, one must consider the quality of the company as well as valuation. The Dogs of the Dow leads us in a good direction, telling us to buy stocks at the low end of their business cycle when they are at a good value. But I don’t think it does a very good job at addressing quality. By raising their dividend year after year for over 25 years the stocks on the Dividend Champions list have demonstrated their financial strength over a long period of time. And although some of them may cut their dividend or fall on hard times, I believe you’re starting at a much stronger point than if you use the Dow 30 as your universe of stocks to choose from.

Below is a theoretical portfolio made up of the 20 highest yielding Dividend Champions, the Dogs of the Champions, on 1/2/2019. Eventually we hope to turn this into a live portfolio.

 

Returns

(Since 12/31/18 As of 11/8/19)

ChampionsSPY
18.63%25.21%

Notes

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  • Price information updated every weekend.  Please refresh this page for the latest stock information.
Company name
Ticker Symbol
# Shares
Cost basis
Last Price
Market value
Div/Share
Div Yield
Chevron Corp.CVX94.72$108.79$117.30$11,110.661.1904.06%
Consolidated EdisonED134.31$76.46$86.56$11,625.870.7403.42%
Emerson ElectricEMR171.33$59.75$75.16$12,877.160.5002.66%
Helmerich & Payne Inc.HP221.20$47.94$40.73$9,009.480.7106.97%
Kimberly-Clark Corp.KMB89.89$113.94$136.98$12,313.131.0303.01%
Leggett & Platt Inc.LEG287.16$35.84$52.15$14,975.390.4003.07%
Mercury General Corp.MCY200.11$51.71$50.17$10,039.520.6285.00%
Meredith Corp.MDP199.16$51.94$35.79$7,127.940.5756.43%
MDU ResourcesMDU429.20$23.84$28.96$12,429.630.2082.87%
Altria Group Inc.MO212.75$49.39$50.53$10,750.260.8406.65%
National Fuel GasNFG200.24$51.18$45.08$9,026.820.4353.86%
People's United FinancialPBCT722.96$14.43$16.50$11,928.840.1784.30%
Tanger Factory Outlet CentersSKT534.23$20.22$15.78$8,430.150.3559.00%
AT&T Inc.T372.61$28.54$38.04$14,174.080.5105.36%
Target Corp.TGT155.19$66.09$126.45$19,623.780.6602.09%
United Bankshares Inc.UBSI330.21$31.11$37.72$12,455.520.3503.71%
Universal Health Realty TrustUHT166.90$61.37$121.86$20,338.430.6802.23%
Universal Corp.UVV194.69$54.15$53.59$10,433.440.7605.67%
Walgreen's Boots AllianceWBA149.81$19.22$58.71$8,795.350.4603.13%
ExxonMobil Corp.XOM153.70$68.19$69.66$10,706.740.8705.00%

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