Tuesday, April 30, 2013

First Quarter 2013: Top And Bottom Performing Dividend Stocks

Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don't have to watch your portfolio or the market on a daily basis. For the most part, daily, monthly and yearly movements are just noise in the system.

My normal practice is to refresh my analytical spreadsheets each Friday with updated price information on the 220+ stocks that I follow. Even then, I don't normally look at the value of my portfolio or the performance of individual stocks.

However, each quarter I update my income portfolio's performance and benchmark it against the S&P 500 and other portfolios. At that time I will look at performance of individual stocks to understand the overall performance the portfolio.

Recently, I updated my Income Portfolio's performance for the first quarter. Building on that, here are my income portfolio's top and bottom 5 performers year-to-date through March 31, 2013, with their annualized returns:

Top Performers

#5. Johnson & Johnson (JNJ)
Johnson & Johnson is a leader in the pharmaceutical, medical device and consumer products industries. JNJ has enjoyed significant price appreciation this year from around $70 at the beginning of the year to nearly $82 at the end of March.
Yield: 2.9% | Return: 93.17%

#4. Cincinnati Financial Corp. (CINF)
Cincinnati Financial Corp. is an insurance holding company that primarily markets property and casualty coverage. It also conducts life insurance and asset management operations. With its stock moving from around $39 at the beginning of the year to over $47 on March 31st, CINF has built on it strong 2012 performance.
Yield: 3.4% | Return: 126.65%

#3. Genuine Parts Company (GPC)
Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products. Like the companies above, GPC has enjoyed significant price appreciation this year from around $64 to $78 at the end of March. The stock has benefited from investors looking for yield.
Yield: 2.9% | Return: 141.11%

#2. Leggett & Platt, Inc. (LEG)
Leggett & Platt Inc. makes a broad line of bedding and furniture components and other home, office and commercial furnishings, as well as products for non-furnishings markets. O is another stock that has benefited from investors looking for yield. It started the year around $27 and closed March nearly $34.
Yield: 3.6% | Return: 144.87%

#1. Norfolk Southern Corp. (NSC)
Norfolk Southern Corp. operates 20,000 route miles serving 22 eastern states, the District of Columbia, and Ontario, Canada. After a tough 2012, NSC started 2013 around $62 and finished the quarter around $77.
Yield: 2.6% | Return: 156.46%

Bottom Performers

#5 Community Trust Bank Corp. (CTBI)
Community Trust Bank Corp. owns and operates Community Trust Bank, Inc. of Pikeville, KY, which provides commercial banking services in Kentucky and West Virginia; and a trust company. It is a good thing when a stoct on your 5 worse performers has a double-digit positive return (annualized). CTBI started the year around $33 and closed March a little over $34.
Yield: 3.7% | Return: 16.99%

#4. General Dynamics Corp. (GD)
General Dynamics is the world's fourth largest military contractor and also one of the world's biggest makers of corporate jets. Like CTBI, GD produced a double-digit positive return (annualized). It started the year around $69 and closed Q1 up a little over a dollar around $70.
Yield: 3.1% | Return: 13.24%

#3. Illinois Tool Works Inc. (ITW)
Illinois Tool Works Inc. is a diversified manufacturer that operates a portfolio of 60 business units that serve industrial and consumer markets globally. ITW's price close the quarter virtually flat to where it began the year.
Yield: 2.4% | Return: 0.89%

#2. Northwest Natural Gas Company (NWN)
Northwest Natural Gas Co. is a natural gas utility that provides service to some 611,000 residential, 62,000 commercial and 1,000 industrial customers in Oregon and southwestern Washington. NWN was down about $1.50 and closed the quarter at $43.82.
Yield: 4.1% | Return: -5.19%

#1. AFLAC Inc. (AFL)
Aflac Incorporated provides supplemental health and life insurance in Japan (80% of earnings) and the U.S. Products are marketed at work sites and help fill gaps in primary coverage. AFL is down a little over a dollar for the quarter, closing March at $52.02. I still like AFL, but I will like it more if it continues to decline.
Yield: 2.6% | Return: -5.74%

To avoid short-term anomalies, I excluded stocks that I did not own on January 1, 2013 from the above lists. Investing in dividend growth stocks is a long-term proposition, but sometimes it is nice to see that our portfolio is performing well, in addition to collecting higher dividends each month.

Full Disclosure: Long JNJ, CINF, GPC, LEG, NSC, CTBI, GD, ITW, NWN, AFL in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.

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Tags: [JNJ] [CINF] [GPC] [LEG] [NSC] [CTBI] [GD] [ITW] [NWN] [AFL]