DividendMax Ultra Safe Portfolio 2012
The final result for the full year is now in. The results for the second half of the year are in the Q3 & Q4 commentary
The companies in this portfolio must:
- Be in the process of a share buyback
- 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
Q1 Commentary. The new Q2 portfolio can be found at the bottom of the page.
1) The FTSE 100 increased by 1.2% in the first quarter. The Ultra Safe portfolio increased by 3.85%, outperforming the FTSE by 2.65%
2) The Ultra Safe portfolio did the following. No trading is undertaken. Dividends are not taken into account.
3) The portfolio performed extremely well with some notable exceptions. The portfolio was adversely affected by the poor mining and pharmaceutical sector performances.
|
Company |
Entry Price |
End-Q1 Price |
Performance |
Weighting (£1000 = 1%) |
Gain / Loss |
|
BAE |
313 |
300 |
-4.20% |
4 |
-£166.00 |
|
Chemring |
448 |
407 |
-9.10% |
5 |
-£457.00 |
|
Diageo |
1387 |
1502 |
8.29% |
3 |
£248.00 |
|
ICAP |
335 |
393 |
17.30% |
8 |
£1,385.00 |
|
William Hill |
225 |
261 |
16.00% |
4 |
£640.00 |
|
Man Group |
119 |
135 |
13.40% |
4 |
£538.00 |
|
Reckitt Benckiser |
3359 |
3531 |
5.10% |
4 |
£205.00 |
|
BskyB |
669 |
676 |
1.00% |
5 |
£52.00 |
|
WPP |
742 |
854 |
15.00% |
5 |
£755.00 |
|
Kazakhmys |
1121 |
908 |
-19.00% |
4 |
-£760.00 |
|
Rio Tinto |
3675 |
3446 |
-6.30% |
4 |
-£249.00 |
|
Glaxo Smithkline |
1435 |
1406 |
-2.10% |
5 |
-£101.00 |
|
AstraZeneca |
3034 |
2779 |
-9.40% |
4 |
-£336.00 |
|
WH Smith |
534.5 |
545 |
1.90% |
3 |
£59.00 |
|
Next |
2614 |
2983 |
14.10% |
3 |
£423.00 |
|
Sage |
305 |
299 |
-2.00% |
6 |
-£118.00 |
|
Compass |
613 |
655 |
6.80% |
6 |
£411.00 |
|
Vodafone |
177 |
172 |
-2.80% |
10 |
-£282.00 |
|
Inmarsat |
404 |
460 |
13.80% |
7 |
£970.00 |
|
British American Tobacco |
2921 |
3150 |
7.80% |
3 |
£235.00 |
|
Imperial Tobacco |
2238 |
2535 |
13.20% |
3 |
£398.00 |
|
Total Cash |
FTSE 100 |
Portfolio Performance |
|
£100,000.00 |
£101,200.00 |
£103,850.00 |
Here are a list of the changes following the Q1 performance. The portfolio remains the same, but the weightings have been changed to reflect the Q1 performance.
BAE systems weighting is up tp 6% from 4%
Chemring weighting is down to 3% from 5%
ICAP weighting is down from 8% to 5%
WPP weighting is down to 3% from 5%
Kazakhmys weighting is up to 7% from 4%
Rio Tinto weighting is up to 5% from 4%
AstraZeneca weighting is up from 4% to 5%
Sage weighting is up to 7% from 6%
Compass weighting is down from 6% to 5%
Inmarsat weighting is down from 7% to 5%
Q2 Commentary. The new Q3 portfolio can be found at the bottom of the page.
1) The FTSE 100 decreased by 3.4% in the first quarter. The Ultra Safe portfolio decreased by 4.7%, underperforming the FTSE by 1.3%
2) The Ultra Safe portfolio did the following. No trading is undertaken. Dividends are not taken into account.
3) The portfolio performed badly with some serious underperformers including MAN Group (-43.7%) and Chemring (-32.6%). Also performing badly was Kazakhmys, Rio Tinto and ICAP.
|
Company |
Entry Price |
End-Q2 Price |
Performance |
Weighting (£1000 = 1%) |
Gain / Loss |
|
BAE |
300 |
288.5 |
-3.8% |
6 |
-£230.00 |
|
Chemring |
407 |
274 |
-32.6% |
3 |
-£980.00 |
|
Diageo |
1502 |
1638 |
9% |
3 |
£271.00 |
|
ICAP |
393 |
337.5 |
-14.1% |
5 |
-£706.00 |
|
William Hill |
261 |
282.5 |
8.2% |
4 |
£329.00 |
|
Man Group |
135 |
76 |
-43.7% |
4 |
-£1748.00 |
|
Reckitt Benckiser |
3531 |
3368 |
-4.6% |
4 |
-£184.00 |
|
BskyB |
676 |
697 |
3.1% |
5 |
£155.00 |
|
WPP |
854 |
772 |
-9.6% |
5 |
-£480.00 |
|
Kazakhmys |
908 |
722 |
-20.5% |
7 |
-£1433.00 |
|
Rio Tinto |
3446 |
3027 |
-12.1% |
5 |
-£607.00 |
|
Glaxo Smithkline |
1406 |
1448 |
2.9% |
5 |
£149.00 |
|
AstraZeneca |
2779 |
2845 |
2.4% |
5 |
£118.00 |
|
WH Smith |
545 |
548 |
0% |
3 |
£16.00 |
|
Next |
2983 |
3203 |
7.4% |
3 |
£221.00 |
|
Sage |
299 |
278 |
-7% |
7 |
-£491.00 |
|
Compass |
655 |
668 |
2% |
5 |
£99.00 |
|
Vodafone |
172 |
179 |
4% |
10 |
£407.00 |
|
Inmarsat |
460 |
491 |
6.7% |
5 |
£337.00 |
|
British American Tobacco |
3150 |
3247 |
3% |
3 |
£92.00 |
|
Imperial Tobacco |
2535 |
2460 |
-2.9% |
3 |
-£88.00 |
|
Total Cash |
FTSE 100 |
Portfolio Performance |
|
£100,000.00 |
£96,600 |
£95,247 |
Here are a list of the changes following the Q2 performance. The portfolio remains the same, but the weightings have been changed to reflect the Q2 performance.
Chemring from 3 to 8%
Diageo from 3 to 1%
ICAP from 5 to 6%
William Hill from 4 to 3%
Man Group from 4 to 8%
WPP from 5 to 6%
Kazakhmys from 7 to 8%
Rio Tinto from 5 to 8%
Glaxo from 5 to 4%
Astra Zeneca from 5 to 4%
Next from 3 to 1%
Compass from 5 to 3%
Vodafone from 10 to 7%
Inmarsat from 5 to 3%
BAT from 3 to 1%
Imperial Tobacco from 3 to 4%
The Q3 -Q4 result is below
We saw a positive result of £5225 for the second half of the year, which was a little disappointing as Chemring and Vodafone proved to be real drags on performance and both had a high weighting, albeit, we reduced the Vodafone weighting at the end of the second quarter. During this time the FTSE 100 rose by 5.8% which would equate to £5800 meaning that the ultra safe portfolio underperformed the market by a small amount. With dividends of course we would have outperformed.
|
Company |
Q3 Entry Price |
Year end Price |
Performance |
Weighting (£1000 = 1%) |
Gain / Loss |
|
BAE |
288.5 |
337 |
16.80% |
6 |
£1,008.00 |
|
Chemring |
274 |
230 |
-16.00% |
8 |
-£1,284.00 |
|
Diageo |
1638 |
1784 |
8.90% |
1 |
£146.00 |
|
ICAP |
337.5 |
306 |
-9.30% |
6 |
-£560.00 |
|
William Hill |
282.5 |
347 |
22.80% |
3 |
£685.00 |
|
Man Group |
76 |
83 |
9.20% |
8 |
£737.00 |
|
Reckitt Benckiser |
3368 |
3872 |
14.96% |
4 |
£598.00 |
|
BskyB |
697 |
767 |
10.00% |
5 |
£500.00 |
|
WPP |
772 |
889 |
15.10% |
6 |
£906.00 |
|
Kazakhmys |
722 |
777 |
7.60% |
8 |
£608.00 |
|
Rio Tinto |
3027 |
3505 |
15.79% |
8 |
£1,263.00 |
|
Glaxo Smithkline |
1448 |
1332 |
-8.00% |
4 |
-£320.00 |
|
AstraZeneca |
2845 |
2903 |
2.00% |
4 |
£80.00 |
|
WH Smith |
548 |
668 |
21.89% |
3 |
£657.00 |
|
Next |
3203 |
3704 |
15.64% |
1 |
£156.00 |
|
Sage |
278 |
294 |
5.70% |
7 |
£399.00 |
|
Compass |
668 |
725 |
8.50% |
3 |
£255.00 |
|
Vodafone |
179 |
154 |
-13.90% |
7 |
£977.00 |
|
Inmarsat |
491 |
582 |
18.50% |
3 |
£555.00 |
|
British American Tobacco |
3247 |
3113 |
-4.10% |
1 |
-£41.00 |
|
Imperial Tobacco |
2460 |
2370 |
-3.60% |
4 |
-£146.00 |
|
Total Cash |
FTSE 100 |
Portfolio Performance |
|
£100,000.00 |
£105,897 |
£105,571 |
-
Company3 Div YieldP/ECoverFDISectorPriceWeighting
-
BAE Systems7.94%7.82.15.7%Aerospace & Defence288.56.0%
-
Chemring Group4.95%8.44.218.6%Aerospace & Defence274.08.0%
-
Diageo3.89%15.72.06.4%Beverages1638.01.0%
-
ICAP8.84%9.02.015.3%Financial Services337.56.0%
-
William Hill5.94%9.82.512.0%Travel & Leisure282.53.0%
-
Man Group11.33%10.41.1-22.7%General Financial76.08.0%
-
Reckitt Benckiser5.55%14.01.98.7%Household Goods3368.04.0%
-
British Sky Broadcasting Group4.8%13.71.916.6%Media697.05.0%
-
WPP3.42%11.53.014.4%Media772.06.0%
-
Kazakhmys2.9%6.29.650.3%Mining722.08.0%
-
Rio Tinto2.97%6.97.511.9%Mining3027.08.0%
-
GlaxoSmithKline6.88%12.71.66.1%Pharmaceuticals & Biotechnology1448.04.0%
-
AstraZeneca9.56%6.52.579.5%Pharmaceuticals & Biotechnology2845.04.0%
-
WH Smith4.64%9.02.39.8%Retailers548.03.0%
-
Next4.35%11.12.79.6%Retailers3203.01.0%
-
Sage Group5.52%14.52.49.2%Software & Computer Services278.07.0%
-
Compass Group5.45%14.52.08.8%Travel & Leisure668.03.0%
-
Vodafone Group8.25%11.21.418.5%Mobile Telecommunications179.07.0%
-
Inmarsat8.99%7.92.07.1%Telecomms491.03.0%
-
British American Tobacco7.38%15.11.619.2%Tobacco3247.01.0%
-
Imperial Tobacco Group4.18%11.02.110.5%Tobacco2460.04.0%
Aerospace & Defence
BAE Systems, Chemring Group
BAE Systems
Here we choose BAE systems for it's superior yield and share buyback programme. It is currently yielding 8.43% on the 3 dividend optimizer. It has a forward P.E of around 7 and is forecast to increase it's dividend by around 5.5%. 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.
Chemring
Chemring has an amazing recent track record, growing rapidly by acquisition. It has a decent yield, a good forecast dividend growth target and has very high dividend cover. We prefer it the BAE in spite of the lower yield and so give it a slightly higher weighting in the portfolio.
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
Diageo
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
Equity Investments
No company in this sector meets our criteria
Financial Services
ICAP
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
Man Group
Man Group
Although strictly speaking, MAN does not meet our criteria of having to have a forecast dividend increase for the current year, it has maintained it's dividend and changed it's year end. We believe it is worth holding as it has a lot of surplus cash and will benefit hugely from a return to stability in the markets as clients return and the redemptions stop. It's very high yield tempts us into a decent weighting of 4% of the portfolio.
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
Reckitt Benckiser
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
British Sky Broadcasting Group, WPP
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%.
WPP
Strong results for the first 3 quarters of the year bode well for the full year outcome. Strong dividend cover and a high expected dividend increase make this advertising giant a 4% weighting in the portfolio.
Mining
Kazakhmys, Rio Tinto
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.
Rio Tinto
This mining giant is buying back it's own shares, enjoys high dividend cover and has considerable scope to increase the dividend through increased profitability and strong cash flows.
We recommend a weighting of 4% each for Rio and Kazakhmys.
Mobile Telecommunications
Vodafone Group
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 & Gas Producers
No company in this sector meets our criteria
Oil Equipment, Services & Distribution
No company in this sector meets our criteria
Personal Goods
No company in this sector meets our criteria
Pharmaceuticals & Biotechnology
GlaxoSmithKline, AstraZeneca
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.
Astra Zeneca
On a very low P/E, the prospects for Astra Zeneca are fully accounted for in the low share price,. It remains a highly cash generative business.
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
WH Smith, Next
WH Smith
WH Smith is another company with an excellent track record and is not expensive.
Next
Next is good value on a P/E of under 12 and a dividend approaching 5%. Good value for this very well run business.
Software & Computer Services
Sage Group
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
Inmarsat
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
British American Tobacco, Imperial Tobacco Group
British American Tobacco
A high P/E and a high yield and a very good increase in the dividend forecast. Highly defensive.
Imperial Group
A lower P/E than BAT and a lower yield. Highly defensive
Travel & Leisure
William Hill, Compass Group
William Hill
William Hill is a reovery play on a P/E of about 10 with a yield approaching 7%.
Compass Group
Not cheap on a PE of over 14x, but the yield is nearing 6% and the company is a play on quality management and a very good track record of growth.
