This is an idea tracking portfolio, rather than just tracking ideas as tickers its more interesting to simulate the process to see weight and growth over time, and so I will track purchases and sell of shares that would cost around $1,000 at time of hypothetical purchase.
WMD Portfolio Stock selection process identifies equities with the following characteristics:
- Wide Moat - stocks selected for the portfolio should exhibit a durable competitive advantage to protect the company's shares and the ability to payout dividends
- Income - A higher than average dividend yield. At the time of this writing the current yield for S&P 500 stocks is around 1.9%, the WMD Portfolio generally looks for companies with the ability to pay at least 50% more than the current S&P 500 yield
- Safety - Low payout ratio (generally less than 60% of earnings and free cash flow) of their overall profits as dividends. This is to protect the dividend in the event of downturns.
- Dividend growth - stocks selected for this portfolio should be able to support a dividend growth rate that combined with their current yield exceeds 10 percentage points. For example, a stock paying 3.5% dividend yield should be able to grow its dividend by at least 6.5% or more each year
- Total Return: the combined return of the stocks’ capital gains plus the dividend income received
- Current Yield: the “look through” yield of the portfolio as a whole
- Dividend Raises and Cuts: tracking the total number of the Portfolio companies’ dividend raises and cuts over time
- Coca Cola
- Raven Industries
- Spectra Energy
- Occidental Petroleum
- Rolls-Royce Holdings
- Exxon Mobil