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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 1542.0 5.0%
Easyjet 8.22% 11.8 1.8 4.8% Travel & Leisure 1252.0 5.0%
Berkeley Group Holdings 8.17% 11.4 1.4 4.5% Household Goods and home construction 1337.0 5.0%
Ladbrokes Coral 6.98% 14.9 1.3 3.4% Travel & Leisure 131.0 5.0%
Standard Chartered 6.81% 10.3 2.5 8.3% Banks 1194.0 5.0%
Anglo American 6.65% 11.4 2.1 6.0% Mining 1479.0 5.0%
Sainsbury's 6.25% 11.1 1.8 4.8% Food and Drug Retailers 315.0 5.0%
Chemring Group 4.9% 10.8 3.0 -11.6% Aerospace & Defence 200.0 5.0%
Moneysupermarket.com Group 5.47% 17.3 1.6 19.9% Media 188.0 5.0%
Vodafone Group 5.25% 21.3 1.2 8.4% Mobile Telecommunications 190.0 5.0%
Sky 4.74% 14.3 1.9 14.4% Media 880.0 5.0%
Rexam 4.55% 13.7 2.2 11.8% General Industrials 523.0 5.0%
Greene King 3.68% 14.3 2.1 6.0% Beverages 830.0 5.0%
Friends Life 8.62% 13.9 1.3 4.3% Life Insurance 325.0 5.0%
Royal Dutch Shell 'B' (UK) 6.66% 10.5 2.2 5.8% Oil & Gas Producers 2530.0 5.0%
Balfour Beatty 6.48% 14.1 1.8 3.5% Construction & Materials 221.0 5.0%
AMEC foster Wheeler 5.08% 12.7 2.1 15.1% Oil Equipment, Services & Distribution 1178.0 5.0%
BP 8.75% 10.5 1.9 10.0% Oil & Gas Producers 502.0 5.0%
Man Group 6.5% 15.8 1.6 111.0% General Financial 87.0 5.0%
Sage Group 4.44% 16.9 2.0 5.9% Software & Computer Services 375.0 5.0%

Aerospace & Defence

Chemring Group

Chemring is our choice this year as we see it as a good recovery play.

Alternative Energy

No company in this sector meets our criteria

We see no value in this sector

Automobiles & Parts

No company in this sector meets our criteria

We see no value in this sector

Banks

Standard Chartered

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:

http://www.dividendmax.co.uk/dividend-investor-news/1649/investors-chronicle-dividend-of-the-week---21102013

Beverages

Greene King

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%

Chemicals

No company in this sector meets our criteria

We see no value in this sector

Commercial Transportation

No company in this sector meets our criteria

We see no value in this sector

Construction & Materials

Balfour Beatty

Balfour Beatty is once again our choice in this sector.

Consumer Staples

No company in this sector meets our criteria

We see no value in this sector

Electricity

No company in this sector meets our criteria

SSE is the choice for us in this sector for its status as a dividend champion.

Electronic & Electrical Equipment

No company in this sector meets our criteria

We see no value in this sector

Equity Investments

No company in this sector meets our criteria

We see no value in this sector

Financial Services

No company in this sector meets our criteria

We are going to stick with Man Group in spite of it not working last year.

Food and Drug Retailers

Sainsbury's

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%.

Food Producers

No company in this sector meets our criteria

We see no value in this sector

Forestry & Paper

No company in this sector meets our criteria

We see no value in this sector.

Gas, Water & Multiutilities

No company in this sector meets our criteria

We cannot find value in this sector

General Financial

Man Group

General Industrials

Rexam

This year we are going for Rexam

Health Care Equipment & Services

No company in this sector meets our criteria

We see no value in this sector

Hedge Funds

No company in this sector meets our criteria

We see no value in this sector

Household Goods

No company in this sector meets our criteria

We see no value in this sector

Household Goods and home construction

Berkeley Group Holdings

We see no value in this sector

Industrial Engineering

No company in this sector meets our criteria

We see no value in this sector

Industrial Metals

No company in this sector meets our criteria

We cannot find value in this sector

Industrial Transportation

No company in this sector meets our criteria

We see no value in this sector

Investment Trusts

No company in this sector meets our criteria

We see no value in this sector

Leisure Goods

No company in this sector meets our criteria

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

Moneysupermarket.com Group, 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:

http://www.dividendmax.co.uk/dividend-investor-news/1536/investors-chronicle-dividend-of-the-week---05082013

Mining

Anglo American

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:

http://www.dividendmax.co.uk/dividend-investor-news/1520/investors-chronicle-dividend-of-the-week-22072013

Mobile Telecommunications

Vodafone Group

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:

http://www.dividendmax.co.uk/dividend-investor-news/1517/investors-chronicle-dividend-of-the-week-01072013

and we reiterate here:

http://www.dividendmax.co.uk/dividend-investor-news/1717/investors-chronicle-dividend-of-the-week-181113

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:

http://www.dividendmax.co.uk/dividend-investor-news/1634/investors-chronicle-dividend-of-the-week---23092013

Oil & Gas Producers

Royal Dutch Shell 'B' (UK), BP

Last year it was BP, which ourperformed Royal Dutch Shell. This year we expect Royal Dutch to outperform BP.

Personal Goods

No company in this sector meets our criteria

We see no value in this sector

Pharmaceuticals & Biotechnology

No company in this sector meets our criteria

This year we are going for Astra Zeneca, which we believe is on the road to recovery. It has been beefing up its research pipeline through a series of acquisitions and currently yields just shy of 5% (Historic) We featured this in the investors chronivle as dividend of the week and the article can be found here:

http://www.dividendmax.co.uk/dividend-investor-news/1645/investors-chronicle-dividend-of-the-week---14102013

Property

No company in this sector meets our criteria

We see no value in this sector

Real Estate

No company in this sector meets our criteria

We see no value in this sector

Real Estate Investment & Services

No company in this sector meets our criteria

We see no value in this sector

Real Estate Investment Trusts

No company in this sector meets our criteria

We see no value in this sector

Retailers

No company in this sector meets our criteria

We see no value in this sector

Software & Computer Services

Sage Group

As with last year we are going with Sage for its buyback program and steady dividend with the possibility of more special dividends.

Support Services

No company in this sector meets our criteria

We see no value in this sector

Technology Hardware & Equipment

No company in this sector meets our criteria

We see no value in this sector

Telecomms

No company in this sector meets our criteria

We see no value in this sector

Tobacco

No company in this sector meets our criteria

Imperial Tobacco look very very good value at this level with their stated dividend policy of increasing the dividend by 10% per annum. They have a much higher yield than sector peer British American Tobacco and have an historic yield of 5.2% (at 2247p) We featured Imperial Tobacco as one of our investors Chronicle 'dividends of the week' and you can find our original analysis here:

http://www.dividendmax.co.uk/dividend-investor-news/1684/investors-chronicle-dividend-of-the-week---13112013

Travel & Leisure

Easyjet, 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.