With earnings season in full swing and Wall Street analysts getting a good look at second-quarter numbers, we are seeing many of the firms we cover tweaking the top portfolios they prepare for institutional and high net worth clients. A new report from UBS includes changes to the firm’s Dividend Ruler stocks portfolio.
The UBS Dividend Ruler stocks portfolio offers investors what the analysts feel are the ultimate total return vehicles to add to a long-term growth portfolio. The stocks in most cases pay better than average dividends, consistently raise those dividends and have solid growth potential — the three keys for overall investing success. The Dividend Rule portfolio has substantially outperformed the S&P 500 since its inception in 2003.
We profile the new changes to the Dividend Ruler stocks and highlight the current four top-yielding companies that the UBS team has residing in the portfolio.
AFLAC Inc. (NYSE: AFL) was removed from the portfolio and there is a key reason. The analysts cite the slowing dividend growth at the giant insurer, from a mid-teens rate to just 5%. They also see forward fundamentals slowing as another reason for the removal. Shares closed most recently at $61.79.
PepsiCo Inc. (NYSE: PEP) was added to the portfolio. The UBS analysts highlight that the company raised the dividend 7% in May, and they see dividends growing at a similar rate over the next three to five years. The UBS team also believes the company should continue to benefit from an improving pricing environment, together with cost savings from both productivity gains and lower commodity input costs. PepsiCo investors are paid a solid 2.9% dividend, and the shares closed Wednesday at $96.35.