Table of Contents
If you want to be inspired by examples of the best stock portfolios and strategies, look no further. I have compiled 13 excellent example portfolios that will enable you to choose the right strategy to kick-start your investing journey.
I enjoy sharing my latest research as a certified financial technical analyst, researcher, and investor for over 20 years.
Most of the research, screening and implementation of the portfolios in this article have been performed with Stock Rover, our valued partner, and our review winner for best stock market analysis software and best portfolio management tool. Read the in-depth Stock Rover review to find out more.
1. Berkshire Hathaway Stock Portfolio
One way to think of Berkshire Hathaway (NYSE: BRK.B) is as a giant stock portfolio.
Thus, you can create your own Buffett stock portfolio by reading lists of stocks Berkshire Hathaway owns. The thinking behind this portfolio is that its performance could replicate Warren Buffett’s success.
Berkshire Hathaway’s ten largest stock holdings in 2020 were Bank of America (BAC), Coca-Cola (KO), Kraft Heinz (KHC), Apple (AAPL), Wells Fargo (WFC), American Express (AXP), US Bancorp (USB), Bank of New York Mellon (BK), and Sirius XM (SIRI). You could create a portfolio by placing 10% of your investment in each of those stocks.
This strategy has risks because it is heavily focused on the traditional economy, heavy industry, energy, finance, real estate, tech, and the US economy. However, Buffett has done well by it; he had the world’s fourth-largest fortune of $82.3 billion in September 2020.
The Berkshire Hathaway Portfolio 2022
| Ticker | Company |
| AAPL | Apple |
| BAC | Bank of America |
| KO | Coca-Cola |
| WFC | Wells Fargo |
| AXP | American Express |
| KHC | Kraft Heinz |
| USB | US Bancorp |
| JPM | JPMorgan Chase |
| MCO | Moody’s |
| GS | Goldman Sachs Group |
| BK | Bank of New York Mellon |
| LUV | Southwest Airlines |
| GM | General Motors |
| CHTR | Charter Communications |
| DVA | DaVita |
| UAL | United Airlines Holdings |
| V | Visa |
| MA | Mastercard |
| LSXMK | Liberty SiriusXM Gr |
| COST | Costco Wholesale |
| PNC | PNC Financial Services Gr |
| AAL | American Airlines Group |
| SIRI | Sirius XM Holdings |
| TRV | Travelers Companies |
Get The Berkshire Hathaway Portfolio In Stock Rover Now
- Related Article: 20 Insights Into Warren Buffett Stocks + Full Portfolio Analysis
2. LST Beat the Market Growth Portfolio
The Liberated Stock Trader Beat the Market Screener seeks to select stocks with a significant chance of beating the S&P500 returns. The screener uses growth in free cash flow and explosive EPS growth. Combining this with Joel Greenblatt’s ROC and Earnings Yield formulas, “the Magic Formula,” we have a selection of stocks that beat the market 5 of the last seven years.
In this article, I will discuss the criteria and the methodology that goes into the screener and cover the current results and the results of 8 years of backtesting.
This work has been made possible due to the fabulous work done by the team over at our partner Stock Rover, who has created a stock research and screening platform that won our in-depth Best Stock Screener Review for the last two years.
Why is Stock Rover so special when creating superior stock screeners? Because Stock Rover maintains a clean 10-year historical database of hundreds of vital ratios, calculations, and metrics. This means you can travel back in time to test if your stock selection criteria have worked in the past.
This Liberated Stock Trader Beat the Market Screener (LST BTM) is built into the Stock Rover library and is available to all Stock Rover Premium Plus Subscribers.
Get the Beat the Market Screener Exclusively on Stock Rover
The Liberated Stock Trader Beat the Market Portfolio Performance.
| 8 Year Performance | S&P500 % Gain January 1 to December 31 | LST Beat the Market Screener % Gain | Result |
| 2013 | 29.8% | 49.4% | Beat |
| 2014 | 11.4% | 16.9% | Beat |
| 2015 | -0.7% | 2.6% | Beat |
| 2016 | 9.5% | 23.2% | Beat |
| 2017 | 19.4% | 37.4% | Beat |
| 2018 | -6.2% | -24.9% | Lost |
| 2019 | 28.9% | 46.8% | Beat |
| 2020 | 18.4% | 51.8% | Beat |
| Average Yearly Return | 13.8% | 25.4% | Beat |
Results Based on $100,000 Invested.
| S&P500 Index Returns | LST Beat the Market Screener | |
| Initial Investment | $100,000.00 | $100,000.00 |
| 2013 | $129,800.00 | $149,400.00 |
| 2014 | $144,597.20 | $174,648.60 |
| 2015 | $134,475.40 | $179,189.46 |
| 2016 | $147,250.56 | $220,761.42 |
| 2017 | $175,817.17 | $303,326.19 |
| 2018 | $164,916.50 | $227,797.97 |
| 2019 | $212,577.37 | $334,407.42 |
| 2020 | $251,961.61 | $507,630.46 |
| Cumulative 8 Year % Gain | +152% | +408% |
| LST Beat The Market By: | 102% |
As you can see, the S&P500 turned $100,000 into $251,961 over the last eight years. The LST Beat the Market Screener turned $100,000 into $507,630 over the same period. This means the LST Beat the Market Screener beat the market by 102%
Beat The Market Example Portfolio Stocks (From January 2020)
| Ticker | Company | Industry | Price | Growth Score | 1Y Return vs. S&P 500 |
| AMD | Advanced Micro Devices | Semiconductors | $77.87 | 76 | 150.90% |
| DXCM | DexCom | Diagnostics & Research | $393.17 | 61 | 149.30% |
| ECL | Ecolab | Specialty Chemicals | $199.48 | 80 | -12.70% |
| FICO | Fair Isaac | Software – Application | $428.58 | 96 | 21.00% |
| MA | Mastercard | Credit Services | $337.51 | 97 | 9.60% |
| MSFT | Microsoft | Software – Infrastructure | $209.33 | 99 | 37.70% |
| NFLX | Netflix | Entertainment | $487.20 | 100 | 70.80% |
| NVO | Novo Nordisk | Biotechnology | $68.78 | 91 | 20.60% |
| PAYC | Paycom Software | Software – Application | $289.71 | 100 | 22.10% |
| PCTY | Paylocity Holding | Software – Application | $157.35 | 83 | 46.00% |
| PYPL | PayPal Holdings | Credit Services | $189.48 | 99 | 67.00% |
| SEDG | SolarEdge Technologies | Solar | $208.37 | 100 | 131.50% |
| Cash | Cash | $1.00 | – | -14.20% | |
| Summary | 90 | 75.00% |
- Read the full article: LST Beat the Market Screener
How to Beat the Stock Market With Stock Rover
I love Stock Rover so much that I spent 2 years creating a growth stock investing strategy that has outperformed the S&P 500 by 102% over the last eight years. I used Stock Rover's excellent backtesting, screening, and historical database to achieve this.
This Liberated Stock Trader Beat the Market Strategy (LST BTM) is built exclusively for Stock Rover Premium Plus Subscribers.
3. ESG Ethical Investment Portfolio Sample
If you care about the environment and the state of the planet, you are probably already taking steps to try and reduce your impact on the world. Perhaps like me, you have an electric or hybrid car, and you are reducing your use of plastics, you recycle, and are eating more vegetarian or even vegan dishes.
But you can do more to help promote and encourage more companies to adopt better Environmental, Social, and Governance (ESG) best practices. You can put your money to work in companies with robust ESG policies.
ESG Investing Principles
ESG investing (Environmental, Social & Governance) enables ethical investors to channel their capital to companies that demonstrate environmental sustainability, social responsibility, and good corporate governance. ESG investing can be done by investing in specific companies or investing in some of the new ESG Exchange-Traded Funds.
| Environment | Social | Governance |
| Air Quality | Labor Policy | Executive Pay |
| Green Energy | Community Impact | Ethical Practices |
| Waste Mgt | Equal Employment | Transparency |
| Hazardous Materials | Equal Opportunity | Accounting & Taxes |
ESG Portfolio Performance
Interestingly, investing in companies doing the right thing ethically is not bad for your investing returns. In the chart above, you can see that the portfolio performance for the Top 20 ESG Companies for the previous two years was 40%, compared to a return for the NASDAQ 100 of 36.9% and only 28.5% for the S&P500.
ESG Portfolio Performance Over 2 & 5 Years
| ESG Investment | 2 Year Performance | 5 Year Performance |
| Stock Rover Top 20 ESG Stocks | +40% | +113% |
| S&P500 Index | +28.5% | +77.3% |
| NASDAQ 100 Index | +36.9% | +108% |
5 Year ESG Portfolio Performance
If we take a look even further back, we can see that the 5-year return for this Stock Rover ESG portfolio was 113%, compared to 108% for the NASDAQ 100 and 77.3% for the S&P500.
Interestingly, some of the best companies in America are pushing hard to improve their ESG profile, so it is not surprising that the ESG portfolio performs well. What is surprising is that ESG companies can outperform the market.
Stock Rover Top 20 ESG Stocks
| Ticker | Company | MSCI ESG Score | MSCI ESG Rating | Sustainalytics Risk Score |
| NEE | NextEra Energy | AAA | Leader | High Risk |
| MMM | 3M | AAA | Leader | High Risk |
| ECL | Ecolab | AAA | Leader | High Risk |
| CRM | Salesforce.com | AAA | Leader | Low Risk |
| A | Agilent Technologies | AAA | Leader | Low Risk |
| NVDA | NVIDIA | AAA | Leader | Low Risk |
| MSFT | Microsoft | AAA | Leader | Low Risk |
| GOOGL | Alphabet | AA | Leader | Medium Risk |
| EW | Edwards Lifesciences | AA | Leader | Medium Risk |
| PG | Procter & Gamble | AA | Leader | Medium Risk |
| HD | Home Depot | AA | Leader | Low Risk |
| BLK | BlackRock | AA | Leader | Medium Risk |
| VRTX | Vertex Pharmaceuticals | AA | Leader | Medium Risk |
| GILD | Gilead Sciences | AA | Leader | Medium Risk |
| MA | Mastercard | A | Average | Low Risk |
| V | Visa | A | Average | Low Risk |
| AAPL | Apple | A | Average | Medium Risk |
| INTC | Intel | A | Average | Low Risk |
| JNJ | Johnson & Johnson | BBB | Average | High Risk |
| DIS | Walt Disney | BBB | Average | Low Risk |
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- Related Article ESG Beat the Market Strategy in our In-Depth Article
- Related Article: How to Build Stock Portfolio Like a Pro – 9 Step Process
- Related Article: How to Buy Good Metaverse Stocks & ETFs
4. The CAN SLIM Growth Stock Portfolio
CANSLIM is a stock investing strategy designed by William J. O’Neil to produce market-beating profit performance. Using the CAN SLIM criteria in your investing should mean profitable returns. Current Earnings, Annual Earnings, New Products, Supply, Leaders, Institutional Sponsorship & Market Direction are vital criteria.
CAN SLIM has the following stock selection criteria:
- C – Current Earnings
- A – Annual Earnings
- N – New Products or Management
- S – Supply and Demand
- L – Leaders
- I – Institutional Ownership
- M – Market Direction
CANSLIM Historical Results – CANGX ETF
The CAN SLIM Select Growth Fund (Ticker: CANGX) was established in 2005 to implement the CANSLIM Select strategy into an ETF so that investors can simply buy the ETF rather than implement the strategy themselves. This is a great idea, except that the CANGX fund does not exhibit the expected 0.94% return per month higher than the underlying index. In fact, from my calculations, it has trailed the S&P 500 by 0.79% per year.
These facts do not necessarily invalidate the strategy; it simply implies that it relies on good portfolio management. The process of rotating the stocks in and out of the portfolio needs to be improved. Also, the cash allocation is important; if you only allocate75% of the cash and the rest is in bonds, you may miss out on the price move. Additionally, you need to move to cash during the stock market downtrends as the M in CANSLIM (Market Direction) suggests. If you do not do this on time, you may suffer additional losses.
The CANSLIM Stock Portfolio Example
| Ticker | Company | Industry | Growth Score | Growth Industry Decile | 1Y Return vs. S&P 500 | EPS 1-Year Chg (%) |
| BGAIF | BioGaia | Drug Manufacturers – Specialty & Generic | 92 | 1 | 50.80% | -0.50% |
| BOLIF | Boliden | Other Industrial Metals & Mining | 81 | 1 | -16.20% | -16.10% |
| EKTAF | Elekta | Medical Instruments & Supplies | 95 | 1 | -11.10% | -1.90% |
| EUXTF | Euronext | Financial Data & Stock Exchanges | 24 | 10 | 38.80% | -10.80% |
| FDX | FedEx | Integrated Freight & Logistics | 92 | 2 | 64.50% | 325.80% |
| JOBS | 51job | Staffing & Employment Services | 91 | 2 | -5.80% | -8.80% |
| NWC.TO | The North West Co | Grocery Stores | 70 | 4 | 19.20% | 21.60% |
| SEOJF | Stora Enso | Paper & Paper Products | 62 | 5 | 13.70% | 10.80% |
| SKSBF | Skanska | Engineering & Construction | 89 | 2 | -1.40% | 25.60% |
| UPNRF | Uponor | Building Products & Equipment | 80 | 4 | 57.40% | 35.70% |
| YMDAF | Yamada Denki Co | Specialty Retail | 87 | 2 | 5.30% | 119.20% |
| Summary | 78 | 3 | 19.60% | 45.50% |
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To summarize, there is plenty of positive testing to prove the system is beneficial to investors’ performance, but how you manage the buying and selling of stocks will be the big differentiator in profits.
- Related Article: Use a CANSLIM Stock Screener Strategy To Beat the Market
5. Greenblatt’s Magic Formula Investing Portfolio
This market-beating system is provided by the investing legend Joel Greenblatt in his best-selling book “The Little Books that Still Beats the Market.”
The strategy Greenblatt shares is called the Magic Formula, based on two specific formulas, now known as the Greenblatt ROC and the Greenblatt Earnings Yield.
I have backtested this system personally, and it works very well, it is a little high maintenance, but the lessons contained within the book are vital.
Greenblatt Return on Capital Ratio
Good Companies Make Great Use of Assets!
This variation of Return on Capital takes Earnings before Interest & Taxation (EBIT) as a percent of Net Property, Plant, and Equipment (PPandE) plus Current Assets.
Greenblatt Earnings Yield
This variation of earnings yield compares Earnings Before Interest & Taxation (EBIT) to Enterprise Value. Joel Greenblatt uses it in his bestselling book The Little Book That Beats the Market.
Using the Magic Formula to Find Stocks
You can register with https://www.magicformulainvesting.com/, the website that accompanies the book, to get free access to a very basic stock screener that implements the magic formula.
The problem is that the site provides no ability to change screener parameters or help you specify your own filters for companies. It will also not help you track which companies you want to invest in or show your past performance or any real financial data.
How to Utilize the Magic Formula
Stock Rover has the Magic Formula Screener built-in and is available for Premium Plus Members.
You will need a Premium Plus Membership, which gives you access to all the criteria and the database with a unique 10-year history. It will also allow you to implement all our Warren Buffett screeners our full list of stock screening strategies, and our Dividend growth and dividend yield strategies.
Importing the Magic Formula Strategy into Stock Rover
The Magic Formula Criteria
Joel Greenblatt specifically suggests you should sell all your “Magic Formula” stocks at the end of the year, re-run the screener and buy the newly recommended shares on the first trading day of the new year to achieve the market-beating results.
Stocks in the Magic Formula Portfolio
| Ticker | Company | Industry | Greenblatt ROC | Greenblatt Earnings Yield | 1Y Return vs. S&P 500 |
| AMEH | Apollo Medical Hlgs | Medical Care Facilities | 34.50% | 23.30% | -22.90% |
| ANTM | Anthem | Healthcare Plans | 250.80% | 10.70% | -4.70% |
| ASR | Southeast Airport Group | Airports & Air Services | 99.00% | 11.00% | -40.50% |
| BIG | Big Lots | Discount Stores | 23.90% | 29.50% | 101.90% |
| BIIB | Biogen | Drug Manufacturers – General | 60.70% | 15.20% | 9.80% |
| BIO | Bio-Rad Laboratories | Medical Devices | 90.10% | 16.80% | 37.70% |
| BIO.B | Bio-Rad Laboratories | Medical Devices | 90.10% | 16.60% | 37.00% |
| BPMP | BP Midstream Partners | Oil & Gas Midstream | 107.00% | 15.70% | -42.80% |
| CHRS | Coherus BioSciences | Biotechnology | 29.40% | 16.10% | -25.70% |
| CI | Cigna | Healthcare Plans | 194.50% | 9.20% | -4.00% |
| CNNE | Cannae Holdings | Restaurants | 118.90% | 65.40% | 10.70% |
| CPRX | Catalyst Pharmaceuticals | Biotechnology | 32.60% | 20.90% | -56.10% |
| EAF | GrafTech International | Electrical Equipment & Parts | 60.80% | 21.00% | -56.00% |
| GLIBA | GCI Liberty | Telecom Services | 69.20% | 10.50% | 17.70% |
| GTS | Triple-S Management | Healthcare Plans | 62.50% | 22.80% | 12.00% |
| HUM | Humana | Healthcare Plans | 238.00% | 9.20% | 40.20% |
| INVA | Innoviva | Biotechnology | 71.80% | 34.70% | -9.30% |
| KIM | Kimco Realty | REIT – Retail | 96.20% | 11.90% | -55.70% |
| LEGH | Legacy Housing | Residential Construction | 54.80% | 11.30% | -31.60% |
| MOMO | Momo | Internet Content & Information | 30.10% | 20.10% | -70.90% |
| MSGN | MSG Networks | Entertainment | 82.40% | 19.90% | -54.00% |
| PDM | Piedmont Office Realty | REIT – Office | 191.80% | 12.80% | -44.70% |
| PRDO | Perdoceo Education | Education & Training Services | 29.10% | 23.80% | -36.40% |
| REGI | Renewable Energy Group | Oil & Gas Refining & Marketing | 40.30% | 36.70% | 212.30% |
| SBR | Sabine Royalty | Oil & Gas E&P | 558.30% | 9.60% | -39.30% |
| SCPL | SciPlay | Electronic Gaming & Multimedia | 64.40% | 63.90% | 41.30% |
| SHLX | Shell Midstream Partners | Oil & Gas Midstream | 61.20% | 11.20% | -63.60% |
| SUPN | Supernus Pharmaceuticals | Drug Manufacturers – Specialty & Generic | 29.10% | 16.00% | -39.50% |
| VHC | VirnetX Hldg | Software – Infrastructure | 59.70% | 196.30% | -8.70% |
| WLKP | Westlake Chemical | Chemicals | 27.60% | 34.30% | -22.50% |
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6. The FAANG Stocks Portfolio
FAANG is attractive portfolio example, because the FAANGs have a high margin of safety because of their huge market capitalizations. Three FAANGS, Apple, Alphabet, and Amazon, had market capitalizations exceeding $1 trillion in 2022. Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG), formerly Google, are five of the fastest-growing stocks in history.
People buy FAANGs because they think their money is safe and will grow.
| Ticker | Company | Value Score | Growth Score | 1Y Return vs. S&P 500 | 2Y Return vs. S&P 500 | 5Y Return vs. S&P 500 |
| AMZN | Amazon.com | 52 | 99 | 66.40% | 36.90% | 409.70% |
| FB | 66 | 100 | 27.90% | 32.60% | 85.40% | |
| GOOGL | Alphabet | 73 | 99 | 2.50% | 1.00% | 35.90% |
| MSFT | Microsoft | 67 | 99 | 36.90% | 68.30% | 332.70% |
| NFLX | Netflix | 55 | 100 | 70.30% | 8.40% | 285.20% |
| Summary | 60 | 99 | 52.40% | 30.80% | 280.30% |
- Related Article: FAANG Stocks, 45 Reasons to Still Buy Them
7. The Bill Gates Portfolio
I am certainly not saying Bill Gates is an investing genius, but he is a genius nonetheless. I have a huge amount of respect for Mr. Gates; not only is he one of the world’s richest men, but he has given so much back to the world not just in monetary measure but in his time and effort. The amount of lives he and Melinda have helped save is countless.
Bill has some very interesting stocks in his portfolio, and as you can imagine, Microsoft, Apple, and his great friend Warren Buffett’s Berkshire Hathaway stocks are in his portfolio.
But how is the performance of Mr. Gate’s portfolio? Well, according to Stock Rover’s excellent portfolio backtesting and performance comparison charting, Bill has managed to beat the S&P 500 by 54% since 2007, which is impressive.
We do not know the origins of Bill Gate’s investing methodology, but we can be sure he has been influenced by Warren Buffett and his history as a technology mogul.
The Bill Gates Stock Portfolio
| Ticker | Company | Value Score | Growth Score | 5Y Return vs. S&P 500 |
| AMZN | Amazon.com | 52 | 99 | 409.20% |
| BABA | Alibaba Group Holding | 63 | 98 | 274.40% |
| AAPL | Apple | 76 | 93 | 236.40% |
| CAT | Caterpillar | 74 | 69 | 77.40% |
| WM | Waste Management | 68 | 86 | 62.10% |
| CCI | Crown Castle Intl | 54 | 95 | 56.60% |
| WMT | Walmart | 89 | 87 | 51.10% |
| CNI | Canadian National Railway | 70 | 81 | 17.40% |
| UPS | United Parcel Service | 67 | 91 | 11.80% |
| ECL | Ecolab | 79 | 80 | 0.10% |
| FDX | FedEx | 73 | 92 | -2.80% |
| TWTR | 53 | 71 | -18.40% | |
| BRK.B | Berkshire Hathaway | 81 | 83 | -25.40% |
| ARCO | Arcos Dorados Holdings | 43 | 53 | -36.90% |
| Cash | Cash | – | – | -91.60% |
| KOF | Coca-Cola Femsa | 84 | 80 | -121.90% |
| LBTYK | Liberty Global | 78 | 58 | -139.10% |
| LBTYA | Liberty Global | 78 | 53 | -141.90% |
| LILA | Liberty Latin America | 69 | 72 | -166.50% |
| LILAK | Liberty Latin America | 69 | 69 | -166.60% |
| TV | Grupo Televisa | 88 | 66 | -168.10% |
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8. The NAMPOF Stock Portfolio
A FAANG alternative is a basket of tech stocks composed of NVIDIA (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), PayPal (NASDAQ: PYPL), Oracle (NYSE: ORCL), and Facebook (NASDAQ: FB). I call this portfolio the NAMPOF.
NVIDIA, Apple, Microsoft, and Oracle are in the NAMPOF Stock Portfolio because those stocks pay dividends. I consider Oracle, Microsoft, PayPal, and NVIDIA value investments because they are relatively cheap and underappreciated by the markets.
The NAMPOF Technology Stock Portfolio
| Ticker | Company | Value Score | Growth Score | 1Y Return vs. S&P 500 | 5Y Return vs. S&P 500 |
| AMZN | Amazon.com | 52 | 99 | 66.40% | 409.70% |
| FB | 66 | 100 | 27.90% | 85.40% | |
| GOOGL | Alphabet | 73 | 99 | 2.50% | 35.90% |
| MSFT | Microsoft | 67 | 99 | 36.90% | 332.70% |
| NFLX | Netflix | 55 | 100 | 70.30% | 285.20% |
| NVDA | NVIDIA | 62 | 100 | 175.70% | 2041.80% |
| ORCL | Oracle | 79 | 82 | -1.10% | -10.30% |
| PYPL | PayPal Holdings | 66 | 99 | 67.50% | 372.70% |
| Cash | Cash | – | – | -14.80% | -91.70% |
| Summary | 61 | 99 | 67.10% | 498.70% |
9. High Growth Dividend Stocks Portfolio
Do you want to find companies that are continually raising their dividends? It is a wise move as businesses that have significant dividend growth are usually growing sales and market dominance.
What if you could find companies that have experienced dividend growth over the last ten years and are on sale at bargain-basement prices by the stock market? Welcome to the Dividend Growth + High Margin of Safety strategy.
10 Year Dividend Growth Strategy
10 Year Dividend Growth Screening Criteria
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The Dividend Kings or Dividend Aristocrats strategy essentially means investing in companies with a long history of continually paying and increasing dividends.
For this, you will need a stock screener with a significantly sizeable historical database (at least ten years) of earnings and dividend payments, such as Stock Rover.
The criteria shown here is the calculation for a 10-year period.
Dividend Growth Criteria Explanation:
- Dividend Yield > 1.5%. This is a simple filter designed to ensure only companies paying a dividend above 1.5% are listed. Anything less than 1.5% will not even payout in line with inflation.
- Dividend 1 Year Change > 8%. We want to see only companies who have increased dividends in the last fiscal year of over 8%.
- Dividend 3 Year Change > 8%. Next, we filter down to companies with at least an average increase of 8% over the last three years.
Dividend Growth Screener – Criteria Implemented Into Stock Rover - Dividend 5 Year Change > 8%. Again, only those companies increasing dividends by more than 8% over the last five years.
- Dividend 10 Year Change > 8%. You get the idea. :)
- Payout Ratio >10 < 40. The payout ratio is designed to ensure the company makes enough profits to continue paying the dividends and sustain the increases. You can reduce the “<10” to see more stocks in the scan. We do not want companies paying more than 40% of their profits out in dividends; they need to retain cash flow for future growth and capital investments.
- Sales 5 Year Average (%) > 4%. This filter is designed to ensure that the company is increasing sales, at least on average, to pay for the above growth in dividends.
- Margin of Safety > 0. (Exclusive to Stock Rover) For me, the most important criterion of all, the Margin of Safety, using Warren Buffett’s calculation, the forward discounted cash flow (see our article on Intrinsic Value). Essentially, the higher the margin of safety, the more of a discount you are buying a stock for.
These criteria would typically return a list of only 5% of the NYSE or NASDAQ listed stocks.
Stocks in a High Dividend Yield Portfolio
| Ticker | Company | 5Y Return vs. S&P 500 | Dividend Yield | Dividend Per Share | Earnings Yield | Return on Equity |
| AGM | Federal Agricultural | 93.40% | 4.80% | $3.20 | 11.80% | 10.30% |
| GRP.U | Granite REIT | 70.30% | 3.90% | $2.20 | 8.10% | 10.10% |
| AGM.A | Federal Agricultural | 65.10% | 5.50% | $3.20 | 13.40% | 10.30% |
| AQN | Algonquin Power | 62.50% | 4.30% | $0.62 | 6.80% | 12.40% |
| NRG | NRG Energy | 20.60% | 4.00% | $1.20 | 55.00% | 239.40% |
| STLD | Steel Dynamics | 4.90% | 3.40% | $1.00 | 8.40% | 12.90% |
| JPM | JPMorgan Chase | -13.00% | 3.80% | $3.60 | 7.80% | 8.90% |
| OGS | ONE Gas | -14.50% | 3.10% | $2.16 | 5.10% | 8.50% |
| CSCO | Cisco Systems | -15.90% | 3.70% | $1.44 | 6.80% | 29.60% |
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- Learn all the details and methodology behind the high dividend growth strategy.
- Our 7 Best Value & Dividend Investing Strategies & Scans
10. Warren Buffett’s 90/10 Portfolio
In his 2013 Letter to Shareholders, Buffett proposed a simple hybrid portfolio for ordinary people.
Buffett’s model portfolio consists of 90% S&P 500 stocks and 10% short-term government bonds. Buffett designed this defensive portfolio for the average investor he thinks needs asset protection more than growth.
Buffett recommends investors buy a low-cost S&P 500 Index fund for the stocks, but you could use the same strategy for value stocks. The danger with the 90/10 Portfolio is that it relies on American stocks.
In today’s world, a 90/10 portfolio with 30% US stocks, 30% European Stocks, 30% Chinese stocks, and 10% bonds could be a good idea. Global diversification could be a smart strategy because coronavirus demonstrates how vulnerable national and regional economies are to outside threats.
- Related Article: How to Invest in Index Funds – The Complete Guide
11. Bernstein’s No Brainer Stock Portfolio
Bernstein recommends this simple strategy in his book The Intelligent Asset Allocator. Bernstein bases his plan on academic research and historical performance. He designed the No Brainer Portfolio for long-term performance.
The No Brainer Portfolio consists of 25% Bonds, 25% European stocks, 25% US small-cap stocks, and 25% S&P 500 stocks. Simplicity is this strategy’s advantage.
The No Brainer Portfolio’s disadvantage is high exposure to the risks of Europe and the US small-cap market.
Today a person could modify the No Brainer by replacing the US small-cap stocks or the European stocks with 25% Chinese stocks.
Another strategy could be to replace the European or US Small Cap stocks with emerging markets stocks.
12. Diversified Stock Portfolio Example
Paul Merriman thinks investors need to diversify among asset classes to protect their assets.
To that end, Merriman offers a simple formula for buying stocks by asset class. Merriman proposes dividing the portfolio by ten and making 10% of investments in different kinds of stock.
Here’s Merriman’s proposal:
- 10% S&P 500
- 10% US Large-Cap Value
- 10% US Small-Cap Blend
- 10% U.S. Small Cap Value
- 10% US REITs
- 10% International Large Cap Blend
- 10% International Large Cap Value
- 10% International Small Cap Blend
- 10% International Small Cap Value
- 10% Emerging Markets
The advantage of this model is that it is simple and provides a high level of diversification. Diversification protects assets and limits exposure to many risks.
The disadvantage of Merriman’s proposal is that it will only generate small gains. An investor could miss big share value growth in the S&P 500 or the Nasdaq 100. This portfolio could also lock in risks from small caps or REITs.
13. The Ivy League Stock Portfolio
America’s famous Ivy League Universities are among the world’s largest and most successful private investors. Forbes writer Simon Moore thinks ordinary people can make money by copying the Harvard, Yale, and Stanford portfolios.
The three universities’ portfolios include 35% US Stocks, 28% bonds, 15% foreign stocks, 11% commodities, and 11% real estate. The advantage of this portfolio is that it puts most of the money in the investment with the highest growth US stocks.
The disadvantage to the Ivy League Portfolio is that you will need to invest in more complex investments, including commodities. Thus, an Ivy League portfolio is a good choice for high-income individuals.
An investor could modify the Ivy League Portfolio by eliminating real estate and commodities. The investor could replace the real estate with REITs and the commodities with stock in commodities-producing businesses such as oil companies or commodities Exchange Traded Funds (ETFs).
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Final Thoughts
The team and I sincerely hope you find inspiration from these examples of winning stock portfolios. What inspiration did you get from this article? Share your thoughts in the comments below.
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The Dividend Growth portfolio does appeal to me. After that, I would prefer Ivy League Stock Portfolio because of it’s inclusion of commodities which can shine at times of inflation such as today.
I like your style and thinking Rajeev.
Barry
Loved reading this article – the insights are amazing and validates some of the investments I have made.