How our £10,000 equity income portfolio for 2019 is doing

by Lee Wild from interactive investor |

After picking 10 great stocks to generate £10,000 annual income, here's how the portfolio is performing.

It's been a great start to the year for stock market investors, despite plenty of concerns, especially around trade wars, valuations, Brexit and slowing global growth, but there have been quite a few setbacks for income investors. 

Marks & Spencer, Centrica and Vodafone are among the big-name FTSE 100 companies forced to cut headline-grabbing dividends, trimming yields from above 9% to more realistic levels.

And it's not been plain sailing for our portfolio, built at the end of 2018, designed to generate £10,000 annual income from investments in 10 stocks. 

However, and despite one high-profile hiccup, our share picks are doing exactly what they were chosen to do, and also providing capital growth, which is the icing on the cake.

Housebuilder Barratt Developments (LSE:BDEV) offered an attractive dividend, and it still yields almost 7% despite generating a 42% capital return for us between 2 January and 29 July. Shares in Legal & General (LSE:LGEN), GlaxoSmithKline (LSE:GSK), which confirms it should maintain the 80p annual payout in 2019, and Renewables Infrastructure Group (LSE:TRIG) are also up 12-15% and paying the dividend we expected them to. 

There are a few underperformers, the most obvious of which is Sainsbury's (LSE:SBRY). The planned takeover of Asda was blocked by the UK competition n commission and, what could have been an industry-changing event, turned into a disaster for the orange-liveried grocer. It's still paying the dividend but must now look for growth elsewhere.

And Vodafone (LSE:VOD), backed at 155p, the mobile telecoms colossus bowed to the inevitable and cut its dividend by 40%. However, the shares still yield 5.5% and the recent decision to realise value in its mobile phone masts business has been warmly received. The share price is now roughly where we backed the stock in January.

Events such as the Vodafone sell-off through much of the first half of 2019 are precisely why we diversify some of the dividend risk away by picking 10 stocks from largely different sectors 

Tobacco giant Imperial Brands (LSE:IMB) has also struggled after dropping its pledge to keep growing the dividend by 10% every year beyond 2019. But that really is no surprise given the Lambert & Butler and Davidoff maker must make its e-cigarette product offset a decline in demand elsewhere.

Company Ticker Share price 2 Jan 2019 (p) Share price 29 July 2019 (p) Capital gain/loss (%) Original investment now worth (£) Prospective dividend yield (%)
BP (LSE:BP.) BP. 507 543 7.1 19,274 6.1
Sainsbury's (LSE:SBRY) SBRY 262 198 -24.1 11,378 5.3
HSBC (LSE:HSBA) HSBA 647 665 2.8 15,422 6
Legal & General (LSE:LGEN) LGEN 230 265 15.4 11,543 6.5
GlaxoSmithKline (LSE:GSK) GSK 1,500 1,729 15.3 23,051 4.6
Imperial Brands (LSE:IMB) IMB 2,382 2,093 -12.1 15,816 10.3
Barratt Developments (LSE:BDEV) BDEV 462 658 42.4 11,675 6.9
SSE (LSE:SSE) SSE 1,069 1,099 2.8 8,426 9.1
Renewables Infrastructure Group (LSE:TRIG) TRIG 113 127 11.8 16,772 5.1
Vodafone (LSE:VOD) VOD 155 151 -2.4 15,618 9
FTSE All-Share ASX 3,681 4,165 13.1    
      £143,400   £148,975  
        Capital gain so far £5,575  
        Gain in % terms 3.9  

*based on 29 July prices

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.

The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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