Tuesday, March 31, 2009

Value Line Introduces New Dividend Focused Model Portfolio

This week Value Line (VL) introduced a new model portfolio that will consist of companies with above market dividend yields. The benchmark for the stocks in the portfolio will be the U.S. Broad Dividend Achievers Index ($DAA.X).

The Value Line portfolio will begin with a market value of $1 million and initially consist of 20 equally weighted companies. VL will rebalance the portfolio from time to time in order to keep the stock weightings between 4-6%. VL notes:
"...many of the dividend payers of final interest will likely tend to be large, more established, companies with market capitalizations of more than $5 billion, and this select set will comprise the bulk of our group. In an effort to boost returns, though, we will also seek out mid-cap stocks with good dividend prospects."
The initial portfolio of companies are detailed in the below table.

(click to enlarge)

Value Line above market dividend yield portfolioSource: Value Line

According to Mergent and its Index company, Indxis:
"The Broad Dividend Achievers™ Index is comprised of companies incorporated in the United States or its territories, trade on the NYSE, NASDAQ or AMEX, and have increased its annual regular dividend payments for the last ten or more consecutive years. In addition, Indxis requires that a stock's average daily cash volume exceed $500,000 per day in the November and December prior to the annual reconstitution date on the last trading date in January. The Index is calculated using a modified market capitalization weighting methodology and has been published by the American Stock Exchange under ticker symbol DAA."
Value Line will provide weekly portfolio commentary in its Selection & Opinion publication.

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