High-Dividend Blue Chip
Stock Portfolio Overview
(Additional
Performance Data)
This low-turnover stock portfolio
is designed for those seeking income and growth from blue
chip (high-quality) stocks. To be considered a blue chip stock, a company
must be financially sound while demonstrating an ability to
pay dividends in both good and bad times.
Ideally, to be considered
for inclusion into this portfolio, a company must meet at
least 5 of the 6 following qualifications:
- A minimum of 25 years of uninterrupted
dividends
- Dividends increased 5 times or more in
the last 12 years
- Earnings growth in at least 7 of the
last 12 years
- S&P Quality ranking of B+ or higher
- A minimum of 80 institutional investors
- A minimum of 5 million shares outstanding
Additionally, the company
must have a low dispersion of earnings estimates. Studies
have shown that companies with a history of having analyst
earnings estimates that are closely grouped together (low
dispersion) accompanied by a high degree of accuracy outperformed
the S&P 500 by up to eighteen percentage points per year.
The reason given for this: companies that are performing well
and have a bright future are more likely to give accurate
and complete information to analysts. The result is analyst
earnings estimates are similar and more accurate than normal.
On the other hand, companies
having operational difficulties tend to be less open with
information, which leads to a wider spread in analyst estimates.
The wider spread causes optimists to focus on the extreme
estimates on the high end, and they bid up the price of the
stock. Pessimists will focus on the extreme lower estimates,
but are less likely to short the stock (and therefore balance
out the optimists) because of regulatory and psychological
constraints.
This low-turnover stock portfolio
is also designed to be closer to a "set it and forget it" portfolio as opposed to some of our portfolios where we are investing additional funds each week (some choose to invest additional funds each paycheck or each month). This portfolio usually only has a handful of trades each year.
An investor will ideally invest an equal amount into each
of these stocks which is now easy to do with fractional shares. For those that can't afford
to invest in all of the stocks in the portfolio, subscribers often choose to invest in
the stocks that have only stocks with "buy" or "strong buy" ratings. Subscribers often combine this portfolio with the ETFs/mutual funds in our Highly-Rated No-Load Fund/ETF Portfolio.
Remember, the more stocks
and industries you invest in, the greater your diversification
and safety. So beware having your whole portfolio invested
in only a handful of stocks. However, if your goal is to beat
the market, you have to be careful not to take diversification
too far. If you took diversification to the extreme, you would
buy all of the stocks available in the stock markets. You
would then obviously achieve returns that would match the
market, thereby negating the goal of beating the market. We
attempt to design this portfolio to have enough stocks and
industries to provide the optimum amount of diversification
to earn high returns while providing adequate safety for long-term
investors.
As always, keep in mind that
investing in individual stocks or mutual funds involves risk.
Past performance is never a guarantee of future performance.
Performance
From Inception (May 5, 2003) to November 7, 2025 |
|
Total
Return |
| High-Dividend Blue
Chip Stock Portfolio: |
3,576.4% |
| S&P 500: |
626.3%
|
|
Average Annual
Return |
| High-Dividend Blue Chip Stock Portfolio: |
17.37% |
| S&P 500: |
9.21% |
| |
|
|
| Portfolio Composition (Number of Stocks) |
18 |
|
| |
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