As a long-term dividend investor, it takes patience to see gains from your investments.
In fact, 2 of my largest investments from last year have now generated significant returns.
Throughout this video, I’m going to reveal my 2 best-performing dividend stocks and explain
why this is likely just the beginning.
Intro- My name is Zach and you should leave a like
and subscribe to the channel if you enjoy the video.
If you’ve been following me for a while, then you’ll definitely remember these 2
stocks. Not only did I feature them heavily in videos, but I invested heavily. As of November
2020, 22.3% of the dollars invested in my dividend portfolio were in these 2 stocks.
Stock number 1, was Exxon Mobil with a 68.55% total return. I bought this during one of
the worst years in the history of the Oil & Gas industry. The price of oil plummeted
and even went negative for a period of time. This led to Exxon Mobil stock falling to its
lowest price since 2002. If you go back and watch my videos at that time, I argued that
the price of oil would eventually stabilize at profitable levels and that Exxon’s high
dividend would likely be safe. That thesis has played out and then some. The price of
oil has now risen to the highest price in the last 5 years and the company is beginning
to generate serious cash flow again. They are about to announce Q3 2021 earnings and
I expect it will be great. We may even see a dividend raise in our future.
The current stock price at the making of this video is $63.86. I purchased 138 shares at
an average cost per share of $40.91. Exxon Mobil pays a hefty $3.48 annual dividend.
This gave me an initial 8.5% yield on cost and I’ve earned $580.30 in dividends so
far. I reinvested all of my dividends into purchasing more shares. This has allowed me
to acquire 11.01 more shares of XOM. In total, I now have 149.01 shares. When I include shares
from dividend reinvestment my dividend yield on cost is 9.185%. Without a dividend increase
or reinvestment, my XOM stock will generate $518.52 in dividend income over the next year.
Overall, I invested $5,645.81 in ExxonMobil and my Current Value is $9,516.08. This gives
me a 68.55% total return. I’m planning to hold this stock over the very long term and
reinvest dividends. The next quarter and likely year will be financially great for the company.
I expect they will continue slowly growing their dividend on a consistent basis and resume
share buybacks. When investing in oil stocks, it’s very important to remember how closely
tied it is to the actual price of oil. Supply and demand. I recommend being very conservative
investing here. When Oil prices are booming I would be far more hesitant to buy. However,
if you can buy in at times of weakness then it can be a great addition to a long-term
dividend stock portfolio. Stock number 2, was Federal Realty Investment
Trust with a 68.71% total return. This was another stock that I bought in a time of crisis.
In 2020, the economic shutdowns caused rent collection to be a major concern for REITs.
Since this was a temporary problem, I used it as an opportunity to buy a quality REIT
at a great price. Federal Realty focuses on high-quality retail-based properties in densely
populated, affluent, and high-income areas. I think they have a reliable strategy for
success and I’ve made videos exploring this in the past. FRT has been consistently increasing
their dividend for 54 years and I expect this will continue well into the future. As of
Q2 2021, they have 94% rent collection and have nearly fully recovered.
The current stock price is $122.32. I purchased 41 shares and a cost per share of $77.20.
It pays an annual dividend of $4.28 and I have 5.543% dividend yield on cost. I’ve
earned $255.70 in dividends, which I’ve reinvested into purchasing more shares. This
resulted in 2.66 more shares, bringing my total shares to 43.66. When I include shares
from dividend reinvestment my dividend yield on cost is 5.903%. Over the next year, I’m
estimated to earn $186.80 in dividend income. Overall, I invested $3,165.51 in FRT, and
my current value $5,340.65. This brings my total return to 68.71%. I plan to hold this
long-term and reinvest dividends.
The common thread between my 2 best-performing stocks, is that I invested in them both when
they were deeply unpopular. There was Maximum fear and uncertainty in the market. I bought
quality companies who were in unique times of crisis. This wasn’t done blindly either.
I did my research and determined these companies would recover long term. I also made sure
to swing big. At that time, these 2 stocks represented 22.3% of my dividend portfolio
cost basis. You can’t always expect returns like this in 1 year, but big opportunities
can come. The interesting thing is that these investments
are likely just beginning to pay off. I’m going to keep earnings high dividends and
reinvesting into more shares. The Dividend Snowball is rolling. By the end of 2022, I
wouldn’t be surprised if both of these near 100% returns.
Thank you for watching Dividend Data. I’d greatly appreciate it if you leave a like
and subscribe to the channel. If you follow me on Twitter, link in the description, you
can real-time updates of my buys and dividends coming in. You can support the channel over
on Patreon, where you can gain access to a community discord server. The link is in the
description. Please leave a comment below and thank you for watching!