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When I posted my most recent update of my Dividend Income portfolio on July 3, I promised that I’d make the required changes to the online portfolio within a couple of days.

Talk is cheap. (Or writing in this case.)

Here it is early September and I’m just updating the portfolio now. My bad.

For those of you without perfect recall (or who have better things to stuff their brains with than changes in my portfolios) on July 3 I added SeaDrill (SDRL) to that portfolio. The price on July 3 was $36.25 a share.

How you feel about SeaDrill as a dividend income stock depends on what you think about the company’s high leverage strategy. SeaDrill current pays a dividend of 8.2%, but the company has a history of borrowing on a drilling rig as soon as it can so that it can invest in an additional rig. That strategy has helped SeaDrill build one of the biggest and newest deepwater drilling fleets in the world. But it does expose the company—and shareholders—to significant downside risk if the market for deepwater rigs should take a nosedive.

Right now that’s not a problem. When SeaDrill reported second quarter earnings on August 27 it said market for deepwater rigs is so tight and is projected to remain so tight that rig availability is “minimal” through 2014. That means not only that day rates continue to climb but also that the company is having no trouble signing up customers for rigs that haven’t even floated out of the shipyards yet. For instance, Petrobras (PBR) has signed three-fifteen year contracts with SeaDrill and its Brazilian partner SeteBrasil for three new builds to be delivered between 2016 and 2018 at a day rate of $610,000.

This kind of market gives SeaDrill extraordinary long-term visibility into revenues. That’s one reason that the company bumped up its quarterly dividend by 2 cents a share to 84 cents.

That gives me enough confidence to put these shares in my dividend income portfolio. But I sure wouldn’t go to sleep on this position.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund , may or may not now own positions in any stock mentioned in this post. The fund did own shares of SeaDrill as of the end of March. For a full list of the stocks in the fund as of the end of March see the fund’s portfolio at