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DividendMax Ultra Safe Portfolio 2013

The companies in this portfolio must:

  1. Be in the process of a share buyback
  2. Be expected to increase the dividend in the next two years

Price Earnings (P/E) data as at time of publication

Weighting as at time of publication

Dividend Cover as at time of publication

Company 3 Div Yield P/E Cover FDI Sector Price Weighting
Cash - - - - - - 100%

Aerospace & Defence

No company in this sector meets our criteria

BAE Systems

Here we choose BAE systems for it's superior yield and share buyback programme. It has an excellent track record of increasing it's dividend. We would be underweight in this sector due to U.S. Defence cuts, but would still retain a holding rather than a zero weighting.

 

Alternative Energy

No company in this sector meets our criteria

Automobiles & Parts

No company in this sector meets our criteria

Banks

No company in this sector meets our criteria

Beverages

No company in this sector meets our criteria

Diageo

Diageo is a very defensive stock and is on a premium rating to reflect this. It meets our criteria and so is included in the portfolio with a relatively low weighting of 3%.

Chemicals

No company in this sector meets our criteria

Commercial Transportation

No company in this sector meets our criteria

Construction & Materials

No company in this sector meets our criteria

Consumer Staples

No company in this sector meets our criteria

Electricity

No company in this sector meets our criteria

Electronic & Electrical Equipment

No company in this sector meets our criteria

Engineering

No company in this sector meets our criteria

Equity Investments

No company in this sector meets our criteria

Financial Services

No company in this sector meets our criteria

ICAP

ICAP really is an excellent company. It is tarnished with the 'financials' brush as investors remember what happened to their bank shares. This is no bank. It is a money making machine and it pays a whopping dividend. Absolutely essential part of the portfolio. We attach a very high weighting of 8%.

Food and Drug Retailers

No company in this sector meets our criteria

William Morrison

The outstanding performer in the sector since the takeover of Safeway. This very well managed company is on the up while Tesco finally seems to have hit the rocks after an incredible run. Excellent yield, good cover and a high forecast dividend increase lead us to give this a strong 7% weighting in the portfolio. This is also a defensive stock, being a food retailer.

Food Producers

No company in this sector meets our criteria

Forestry & Paper

No company in this sector meets our criteria

Gas, Water & Multiutilities

No company in this sector meets our criteria

General Financial

No company in this sector meets our criteria

General Industrials

No company in this sector meets our criteria

Health Care Equipment & Services

No company in this sector meets our criteria

Hedge Funds

No company in this sector meets our criteria

Household Goods

No company in this sector meets our criteria

Reckitt Benckiser

Another defensive stock with a long track record. A decent yield, cover and FDI lead us to weight it at 4%

Household Goods and Home Construction

No company in this sector meets our criteria

Industrial Engineering

No company in this sector meets our criteria

Industrial Metals

No company in this sector meets our criteria

Industrial Transportation

No company in this sector meets our criteria

Investment Trusts

No company in this sector meets our criteria

Leisure Goods

No company in this sector meets our criteria

Life Insurance

No company in this sector meets our criteria

Media

No company in this sector meets our criteria

BskyB

Forced into a share buyback to support it's ailing share price in light of the News of the World scandal, BskyB nevertheless is a good investment. There has to be some worry over people cutting their subscriptions in the recession, but the company has shown great resiliance. With decent cover and good forecast dividend growth, we weight it 4%.

 

Mining

No company in this sector meets our criteria

Kazakhmys

Is a major producer of copper. The company now has net cash on the balance sheet and is using it's strong cash generation to return surplus cash to shareholders in the form of buybacks and increased dividends. With dividend cover over 9, the scoppe for increased dividends over time is huge.

 

Mobile Telecommunications

No company in this sector meets our criteria

Vodafone


Vodafone is an absolute must for any dividend portfolio for a number of reasons. It's huge cash generative abilities make it essential. Reasons to hold Vodafone include It's high yield of over 8%, it's stated dividend policy of increasing the dividend by at least 7%. There is also the wild card of what it will do with it's Verison dividends, if and when Verison choose to pay them. Last year Vodafone returned them directly to shareholders in the form of an 4p special dividend with the Interim.

 

Nonlife Insurance

No company in this sector meets our criteria

Oil Equipment, Services & Distribution

No company in this sector meets our criteria

Oil & Gas Producers

No company in this sector meets our criteria

BP is our choice here as it starts to see the back of the Deepwater Horizon disaster.

Personal Goods

No company in this sector meets our criteria

Pharmaceuticals & Biotechnology

No company in this sector meets our criteria

Glaxo Smithkline

Glaxo is a core holding for any portfolio. It is excellent value and pays a good dividend. The new business strategy promises much for shareholders.

 

Property

No company in this sector meets our criteria

Real Estate

No company in this sector meets our criteria

Real Estate Investment & Services

No company in this sector meets our criteria

Real Estate Investment Trusts

No company in this sector meets our criteria

Retailers

No company in this sector meets our criteria

WH Smith

WH Smith is another company with an excellent track record and is not expensive.

 

Software & Computer Services

No company in this sector meets our criteria

Sage

With a 5.5% yield and a P/E of just over 14, Sage is very good value in this generally high growth sector.

Support Services

No company in this sector meets our criteria

Technology Hardware & Equipment

No company in this sector meets our criteria

Telecomms

No company in this sector meets our criteria

Inmarsat

Inmarsat is a growth company on a very low rating with excellent prospects, a very high yield and solid dividend cover. It is entering a year of relative consilidation and the dividend is only expected to increase by 7%, but with the share buyback and a 3 dividend optimised yield of almost 9%, it is great value.

 

Tobacco

No company in this sector meets our criteria

 

Imperial Group

A lower P/E than BAT and a lower yield. Highly defensive

Travel & Leisure

No company in this sector meets our criteria

William Hill

William Hill is a recovery play on a P/E of about 10 with a yield approaching 7%.