In early 2020, I started my small portfolio for a simple “fun” strategy – I pick stable big companies that pay dividends, but based on their Dividend yield TTM.
Simply if the price of a company falls – then it's dividend yield rises. If the company can continue to pay it's dividends (based on fundamental analysis) at an increasing rate, the price will adjust to it's median. Dividend yield TTM is a ratio of share price to total payouts made over the last 12 months.
And this strategy really surprised me – today my portfolio has 68% profit with 27% IRR and 2.8% yield on cost (1.7% dividend yield based on recent prices). And it beats S&P500 return by 20% for 2 years!
https://clip2net.com/clip/m0/5a597-clip-113kb.png
To be honest, AAPL makes 50% of its profits. I love this company and the way they do business. I recorded a dividend yield of 1.4% for myself.
UNH and FUN could be a better choice, as history shows.
The next buy I think will be INTC, because only that bastard has negative returns in my portfolio and 10 year max div yield.
What do you think? Could this strategy be consistent, or it's just luck and good timing?
Total holdings with return, if you are interested: https://clip2net.com/clip/m0/14fbb-clip-25kb.png
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