A Diversified Dividend Growth Portfolio - Undervalued Stock From Each Sector

Seeking AlphaDividend StrategyA Diversified Dividend Growth Portfolio - Undervalued Stock From Each SectorAug. 14, 2020 1:51 PM ET|| Includes: ADM, APOG, BMY, CMCSA, CSCO, ENB, MGA, NUE, STOR, TD, UGIby: Dividend AthleteDividend Athlete Dividend investing, dividend growth investing, long onlyDividend Athlete.cls-1{fill:#024999;}SummaryI present 11 stocks for starting a diversified dividend growth portfolio.
A pick from each of the 11 sectors with great dividend metrics, strong balance sheet, and attractive valuation.
Estimated future 10-yr Yield-on-Cost 10.9%.
Thesis
A very common message I get on my website is "How would you invest X amount of money if you had to start a portfolio right now?"
Although everyone's financial goals and risk tolerance are somewhat different, I decided to give my thoughts on it.
For developing a model dividend growth portfolio, I selected a quality, undervalued stock from each sector.
Many of those stocks already belong in my personal portfolio.
The model portfolio has a 3.9% portfolio yield with an 8.3% yearly dividend growth potential (based on historical growth rates) trading at an average valuation of 13.3x blended earnings.
Using my Dividend Growth Calculator, I estimate that this model portfolio will deliver a 10.9% Yield-on-Cost in 10 years with dividend re-investment.
Utilities
UGI Corporation (UGI) is a gas and power distributor. The company operates in the US and Europe in 4 different business segments: Amerigas, UGI International, Gas Utility and Midstream & Marketing. UGI has paid uninterrupted dividends for 136 years, increasing the dividend for each of the last 33 years. UGI is currently trading at a blended P/E of just under 14.
Dividend Yield 5-yr CAGR Dividend Growth Earnings Payout Ratio (2020e) Debt/Equity 3.77% 8.1% 52% 1.55x

Real Estate
STORE Capital (STOR) is triple-net lease REIT focusing on single-tenant operational real estate. The company has a diverse... Read more