MFI + Dividends = ?

New Investment Approach

This weekend I will talk about where I am going with my investing. My intent is to move about 75% of my investments to stocks, mutual funds, ETFs or CEFs that pay dividends.

Why do that?

There are several reasons:

1. My studies of MFI have shown that dividend paying stocks have out-performed the broader universe of MFI stocks substantially.
2. I work in the insurance industry and am very comfortable picking insurance stocks, which generally pay dividends.
3. I turn 52 next week and I want to start building a portfolio that will allow me to have an income stream for helping with reirement.
4. I need a larger proportion of bonds and utilities for balance to my portfolio.
   
5. Mentally and Emotionally dividend stocks are easier for me to hold. I have all my dividend stocks set to buy additional shares with reinvested dividends. So when a stock has dropped, I can rationalize that I am simply getting more shares with my reinvestments rather than think the sky is falling!

Basic Format and Scorekeeping

As readers of this blog know (if you peruse my 1000+ postings), I do like to keep score. So we are not starting at ground zero, I have gone back to March of 2010 when I really began thinking and implementing a dividend investing strategy with reinvested dividends. I will be keeping track in two primary ways:

1. Each time I buy a stock (whether the initial purchase or reinvested dividend) I mark what the Russell 3000 is selling at. I will then create a table comparing how my stock has done vs that benchmark.
2. I will also do a cash flow analysis where I literally enter the amount of cash invested, cash taken out and ending balance by day. Then I can calculate an annualized IRR (Internal rate of return) which essentially is a metric akin to an APR when you buy a car or house.

I will be showing dollar amounts on many of my holdings data. This are not my actual amounts (I prefer to not reveal that sort of personal data), but rather a multiple. I think actual share counts and dollare figures make for more interesting reading.

Finally, I will write a little commentary on most of the stocks that I hold. This is NEVER meant to be a recommendation or a great analysis. But simply to provide a little color on why I own the stock.

The Tables!

I know, I know... enough blather. What are you holding? How are you doing?

Table 1 - Current Holdings

Stock	Shares	Avg Cost	Current Price	Dividends	Pct Change	R3K Change	Diff
AXS	1,123	33.10	25.43	226	-22.6%	-15.1%	-7.4%
AZN	824	47.21	42.91	1,480	-5.3%	-11.7%	6.4%
BHK	2,850	12.53	13.20	324	6.3%	-15.6%	21.9%
CEL	1,462	26.14	20.47	4,147	-10.8%	3.3%	-14.1%
CHKE	1,616	17.29	12.37	1,611	-22.7%	3.0%	-25.7%
CSCO	1,475	16.97	15.61	88	-7.6%	-16.2%	8.6%
CSQ	3,643	8.31	7.98	165	-3.4%	-2.2%	-1.2%
INTC	1,491	19.84	22.16	519	13.4%	-0.6%	14.0%
JQC	3,693	9.12	8.15	633	-8.8%	-15.7%	6.9%
KMF	1,000	21.90	21.97	-	0.3%	-6.9%	7.2%
KSW	13,048	3.76	3.31	2,150	-7.6%	-2.7%	-4.9%
LNC	2,410	24.34	15.30	280	-36.7%	-7.2%	-29.5%
MNDO	11,029	2.62	1.80	2,400	-22.9%	-12.4%	-10.5%
MSFT	1,137	26.49	25.06	231	-4.6%	-6.4%	1.7%
PM	427	45.08	63.81	1,614	49.9%	6.1%	43.8%
PRE	500	56.26	51.98	-	-7.6%	-6.0%	-1.6%
PVD	300	65.15	56.42	-	-13.4%	-5.8%	-7.6%
RTN	450	46.83	39.31	-	-16.1%	-14.5%	-1.5%
sbs	1,035	39.34	47.54	2,390	26.7%	-1.0%	27.7%
SLF	2,235	28.39	23.22	814	-16.9%	-12.8%	-4.2%
STD	7,168	9.40	7.90	1,717	-13.4%	-8.2%	-5.3%
UNTD	3,330	5.88	5.57	1,564	2.7%	4.1%	-1.4%
USB	2,086	21.94	23.21	477	6.8%	-2.9%	9.8%
VR	2,124	28.81	23.70	837	-16.4%	-12.3%	-4.0%
WBK	584	103.94	91.97	1,225	-9.5%	-6.4%	-3.1%
Total Open					-7.9%	-7.2%	-0.7%
Closed					13.5%	7.8%	5.8%
Combined					2.6%	0.2%	2.5%
IRR Since 12/31/10					-2.2%
Estimated Dividends for Next year
Stock	Shares	Ann Dividend / Share	Yield	Projected Dividend
AXS	1,123	$ 0.92	3.6%	1,033
AZN	824	$ 2.40	5.6%	1,978
BHK	2,850	$ 0.80	6.1%	2,291
CEL	1,462	$ 3.20	15.6%	4,680
CHKE	1,616	$ 0.80	6.5%	1,293
CSCO	1,475	$ 0.24	1.5%	354
CSQ	3,643	$ 0.63	7.9%	2,295
INTC	1,491	$ 0.84	3.8%	1,253
JQC	3,693	$ 0.80	9.8%	2,954
KMF	1,000	$ 1.60	7.3%	1,600
KSW	13,048	$ 0.15	4.5%	1,957
LNC	2,410	$ 0.20	1.3%	482
MNDO	11,029	$ 0.20	11.1%	2,206
MSFT	1,137	$ 0.80	3.2%	910
PM	427	$ 3.08	4.8%	1,314
PRE	500	$ 2.40	4.6%	1,200
PVD	300	$ 3.70	6.6%	1,110
RTN	450	$ 1.72	4.4%	774
sbs	1,035	$ 2.39	5.0%	2,473
SLF	2,235	$ 1.46	6.3%	3,263
STD	7,168	$ 0.78	9.9%	5,591
UNTD	3,330	$ 0.40	7.2%	1,332
USB	2,086	$ 0.50	2.2%	1,043
VR	2,124	$ 1.00	4.2%	2,124
WBK	584	$ 5.80	6.3%	3,386
Total			5.9%	48,896
Dividends in Next 30 Days
Stock	Shares	x Date	Div/Share	Est New Shares
AXS	1,123	9/28/11	$ 0.23	10.0
cel	1,462	9/28/11	$ 0.66	47.0
USB	2,086	9/29/11	$ 0.13	11.0
RTN	450	10/1/11	$ 0.43	4.0
CSCO	1,475	10/5/11	$ 0.06	5.0
LNC	2,410	10/6/11	$ 0.05	7.0
CSQ	3,643	10/13/11	$ 0.05	23.0
PVD	300	10/20/11	$ 1.80	9.0
BHK	2,850	10/13/11	$ 0.07	14.0
KMF	1,000	10/13/11	$ 0.40	18.0
STD	7,168	10/27/11	$ 0.20	147.0
Closed Dividend Stocks
Stock	Gain	R3k Gain	Difference
ace	0.4%	-3.7%	4.1%
AXS	2.3%	-1.7%	4.0%
BKE	34.1%	8.8%	25.3%
BR	15.3%	8.8%	6.5%
CMTL	8.2%	1.3%	6.9%
CSQ	10.5%	14.1%	-3.7%
ENH	4.7%	-3.7%	8.4%
ENH-A	120.1%	78.1%	42.0%
IGI	4.8%	-7.9%	12.7%
INTC	13.3%	14.9%	-1.7%
KSW	27.6%	22.9%	4.7%
MAIL	14.9%	6.4%	8.5%
PDLI	-4.9%	0.7%	-5.6%
PETS	-3.9%	10.0%	-13.9%
PFE	8.9%	14.4%	-5.5%
PM	59.1%	21.9%	37.3%
RAI	47.8%	19.6%	28.2%
RGR	42.1%	1.2%	40.9%
RNR	6.9%	5.2%	1.7%
RNR-C	103.6%	78.7%	24.9%
RTN	12.9%	11.6%	1.3%
SLRC	25.2%	19.0%	6.3%
STD	-9.4%	-0.8%	-8.6%
STRA	17.8%	9.6%	8.2%
SYT	0.3%	-9.3%	9.6%
valu	21.6%	10.6%	11.0%
VR	6.1%	5.5%	0.7%
WTW	1.9%	1.6%	0.3%
Total	13.5%	7.8%	5.8%