DividendMax Model Portfolio 2014
This is the dividendMax model portfolio. The model portfolio outperformed the market dramatically in 2012, 2013 and now 2014. This year we are going to reduce the size of the portfolio and have fewer stocks, around 20, compared to 22-25 the previous year. Our stance is defensive, certainly at this stage and we shall see how the first half pans out before changing our stance.
Now that we have passed the half year we will revamp the portfolio, having outperformed the maket by over 5% in the first half.
We are going to retain the strategy of 20 stocks and equal weightings of 5%
All prices have been rebased to the price as at the 11th July, so we start to monitor from there having locked in our gains for the first half of the year.
Ins
Easyjet with a weighting of 5% at a price of £12.52
Berkeley Group with a weighting of 5% at a price of £23.98
Vodafone with a weighting of 5% at a price of £1.90
BP with a weighting of 5% at a price of £5.02
Outs
AstraZeneca at a profit of 22.63% (dividends not included)
Vedanta at a profit of 24.92% (dividends not included)
SSE at a profit of 15.71% (dividends not included)
Imperial at a profit of 22.70% (dividends not included)
In the second half of the year we increased our porfolio by a fraction (0.1%) or £80. The FTSE 100 (our benchmark) reduced from 6803 to 6585, a drop of 3.2%, so we once again ourperformed by 3.3% in the half year.
| Company | 3 Div Yield | P/E | Cover | FDI | Sector | Price | Weighting |
|---|---|---|---|---|---|---|---|
| Admiral Group | 8.6% | 13.3 | 1.1 | 8.2% | Nonlife Insurance | £15.42 | 5.0% |
| Easyjet plc | 8.22% | 11.8 | 1.8 | 4.8% | Travel & Leisure | £12.52 | 5.0% |
| Berkeley Group Holdings | 8.17% | 11.4 | 1.4 | 4.5% | Home Construction | £13.37 | 5.0% |
| Ladbrokes Coral | 6.98% | 14.9 | 1.3 | 3.4% | Travel & Leisure | £1.31 | 5.0% |
| Standard Chartered plc | 6.81% | 10.3 | 2.5 | 8.3% | Banks | £11.94 | 5.0% |
| Anglo American plc | 6.65% | 11.4 | 2.1 | 6.0% | Mining | £14.79 | 5.0% |
| Sainsbury (J) plc | 6.25% | 11.1 | 1.8 | 4.8% | Food and Drug Retailers | £3.15 | 5.0% |
| Chemring Group plc | 4.9% | 10.8 | 3.0 | -11.6% | Aerospace & Defence | £2.00 | 5.0% |
| Mony Group Plc | 5.47% | 17.3 | 1.6 | 19.9% | Media | £1.88 | 5.0% |
| Vodafone Group plc | 5.25% | 21.3 | 1.2 | 8.4% | Mobile Telecommunications | £1.90 | 5.0% |
| Sky | 4.74% | 14.3 | 1.9 | 14.4% | Media | £8.80 | 5.0% |
| Rexam | 4.55% | 13.7 | 2.2 | 11.8% | General Industrials | £5.23 | 5.0% |
| Greene King plc | 3.68% | 14.3 | 2.1 | 6.0% | Beverages | £8.30 | 5.0% |
| Friends Life | 8.62% | 13.9 | 1.3 | 4.3% | Life Insurance | £3.25 | 5.0% |
| Shell Plc - Class B Shares | 6.66% | 10.5 | 2.2 | 5.8% | Oil & Gas Producers | £25.30 | 5.0% |
| Balfour Beatty plc | 6.48% | 14.1 | 1.8 | 3.5% | Construction & Materials | £2.21 | 5.0% |
| AMEC Foster Wheeler | 5.08% | 12.7 | 2.1 | 15.1% | Oil Equipment, Services & Distribution | £11.78 | 5.0% |
| BP plc | 8.75% | 10.5 | 1.9 | 10.0% | Oil & Gas Producers | £5.02 | 5.0% |
| Man Group Plc. | 6.5% | 15.8 | 1.6 | 111.0% | General Financial | £0.87 | 5.0% |
| Sage Group plc | 4.44% | 16.9 | 2.0 | 5.9% | Software & Computer Services | £3.75 | 5.0% |
Aerospace & Defence
Chemring Group plc
Chemring is our choice this year as we see it as a good recovery play.
Banks
Standard Chartered plc
Standard Chartered remains our favoured bank for its superior dividend track record. We featured this as an Investors Chronicle 'Dividend of the week'. For our original analysis go here:
Beverages
Greene King plc
This year we are going for Greene King as we believe Diageo, our normal choice is over valued. The company should benefit from better economic times and previously under pressure margins should be able to increase slightly as well as an increase in footfall. It's recent interim figures were strong and the interim dividend was increased by 6.3%
Construction & Materials
Balfour Beatty plc
Balfour Beatty is once again our choice in this sector.
Food and Drug Retailers
Sainsbury (J) plc
This year we are opting for Sainsbury which we believe offers similar prospects to other food retailers and offers a superior yield at this point in time. There is no doubt it is a tough trading environment for the supermarkets right now and they should benefit from economic recovery. The shares trade on 11x earnings with an historic yield of 4.8%.
General Financial
Man Group Plc.
General Industrials
Rexam
This year we are going for Rexam
Home Construction
Berkeley Group Holdings
We see no value in this sector
Life Insurance
Friends Life
This year we are going for Resolution Ltd for its safe dividend especially in the light of recent cuts by RSA and Aviva. The dividend is forecast to rise slightly and it is one of the highest yielders in the market.
Media
Mony Group Plc, Sky
This year we are starting off with two media stocks, both of which have great dividend track records; British Sky Broadcasting and Moneysupermarket.com.
British Sky broadcasting was one of our Investors Chronicle 'dividends of the week' and MoneySupermarket throws off loads of cash, which it has been returning to shareholders.
To read our analysis of British Sky Broadcasting go here:
Mining
Anglo American plc
We are going to go for Anglo American which we believe is bombed out and the falls are overdone. Additionally, from this sector we are going for Vedanta Resources for its broad spread of activities. It sits in the mining sector and has been hit hard as a result, but is is also in electricity generation.
We covered BHP Billiton as our Dividend of the week for Investors Chronicle, but we believe Anglo and Vedanta look better value at the moment. For our analysis of the mining sector last year go here:
Mobile Telecommunications
Vodafone Group plc
We see no value in this sector
Nonlife Insurance
Admiral Group
Admiral remains our favourite in this sector for its high yield and fabulous track record. This was our first ever Investors Chronicle Dividend of the week and you can find our analysis here:
and we reiterate here:
Oil Equipment, Services & Distribution
AMEC Foster Wheeler
Amec is once again our Choice. It was featured as one of our Investor Chronicle dividends of the week and you can find our views on it here:
Oil & Gas Producers
Shell Plc - Class B Shares, BP plc
Last year it was BP, which ourperformed Royal Dutch Shell. This year we expect Royal Dutch to outperform BP.
Software & Computer Services
Sage Group plc
As with last year we are going with Sage for its buyback program and steady dividend with the possibility of more special dividends.
Travel & Leisure
Easyjet plc, Ladbrokes Coral
This year we are going Ladbrokes. It yields 5% and is trading close to the bottom of its trading range at 167p. The dividend looks reasonably safe so downside is limited in our opinion.
