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Investment Approach

The team seeks to deliver strong, risk-adjusted performance over time by investing in companies with a history of growing their dividends at an above-average rate. In addition, the team seeks to outperform value peer strategies and rank solidly in the top quartile over a full market cycle. The investment process focuses on companies that have the potential to generate strong and sustainable free cash flow from operations with management teams willing to reward shareholders through increased dividend payments over time.

Distinguishing Features

  • Seasoned, stable investment team with extensive experience managing dividend value strategies
  • Focus on strong and sustainable free cash flow from operations as a sign of strong business fundamentals that potentially lead to higher share price and growing dividend income over time
  • Low-beta approach helps reduce portfolio volatility

Investment Process

Define and evaluate investable universe
  • Prioritize candidates for further research
  • Universe is the Russell 1000 Index, S&P 500 Index and large ADRs on NYSE
  • Rank candidates using proprietary factor analysis identifying valuation, capital discipline and total yield to shareholders
  • Incorporate analysis, including fundamental and valuation analysis, internal centralized research and company meetings
Conduct research and valuation analysis
  • Identify approximately 125 companies that have the potential to generate strong and sustainable free cash flow from operations that create strong dividend opportunities
  • Dividend actions are signals of good capital stewardship
  • Companies that have raised dividends have outperformed non-dividend-payers over time
Construct portfolio and manage risk
  • Determine risk budget and allocate risk to maximize alpha
  • Low relative volatility and leverage, low-earnings volatility, dividend-yield exposure
  • Eliminate unintended bets and ensure style integrity