Rising Dividend Portfolio

Separately Managed Account

This portfolio seeks quality, large-cap companies with rising dividends at reasonable valuations. A quality company should have low debt, stable cash flow, and productive assets. We generally look for firms with five or more consecutive calendar years of dividend increases. Moreover, we attempt to buy these quality companies without paying premium prices.

Quality

The watchword for the WCA Rising Dividend Portfolio strategy is quality. We look for resilient, conservatively-financed businesses with a competitive advantage. Academic studies show that quality is one of the few market anomalies that tend to persist over time.

Steadily Rising Dividends

Eligible companies must have demonstrated at least five consecutive years of dividend increases. Failure to raise the dividend is grounds for removal from the portfolio. Yet, we do not see a rising dividend as an end in itself, as much as a means to find quality. Thus, dividend growth rather than dividend yield is most important to us.

Value

Quality endures and we seek to buy it at a reasonable price. We use a proprietary valuation process using leading-edge techniques.

Style Considerations

We seek solid risk-adjusted returns and income growth, but no strategy outperforms in all markets. Quality styles tend to perform better in flat to down markets, but lag in strong bull markets. Because the strategy avoids high debt and volatile earnings, performance can differ substantially from traditional value strategies.


The Magic Garden of Growth
The gardener must sow seed in fertile ground for a garden to grow. Once planted, young seedlings must be cared for and cultivated. If all goes well, the seed grows into an abundant garden, while also producing the seed and nutrients for next year’s plantings. In this way, the gardener …
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Illusion and Reality
Our economy grows decade to decade, with corporations capturing an increasing share of global income in the form of profits in recent years. Along the way, low interest rates prompted growth, encouraged risk-taking, and pumped up the value of future profits. It is not surprising, then, that stocks have enjoyed …
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Dividend Growers Dominate Other Dividend Categories
Adobe Version:Download Dividend growers outperformed all dividend categories for the past 48 1/4 years with less risk. This is our conclusion based on data provided by Ned Davis Research. The research focuses on dividend payers, non-dividend payers, and dividend cutters. Note that the pattern of dividend growers outperformance holds for both …
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Dividend Growth for the Long Term
To buy quality stocks that increase dividends regularly is a time-honored investing practice, and for good reason. This simple strategy takes a long-term view of investing and focuses on the dividend, not the stock price, which can help some investors maintain perspective. The passive income generated from dividend growth also …
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Leverage and Quality
It is essential not to overlook critical assumptions. One of the most basic stock investing beliefs is that firms will continue to exist — firms do not live forever. Beginning as a start-up and ending in decline, firms undergo many changes over their lives. An idea becomes a business that …
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(More) Spending on the Way
President Biden signed into law a $1.9 trillion Coronavirus aid package last week. New spending of $1.1 trillion is expected this year, with the remaining $0.8 trillion spread out over the coming years. The spending is on top of last year’s $3 trillion fiscal support program, sets up 15% annual …
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Disclosures