The Valuation Dividend is an investment strategy composed of a focused group of 25-35 stocks designed to provide capital appreciation and a higher than average dividend yield in a tax efficient manner.
The Valuation Dividend is managed via a quantitative process and analyst due-diligence. The quantitative process implements rigorous screening criteria to identify undervalued companies with compelling dividend yields. The analyst oversight incorporates in-depth analysis of companies’ financial viability, corporate strength/weakness, and long-term dividend pay-out track record.
In sum, the Valuation Dividend portfolio aims to identify high dividend paying companies with attractive valuation and sustainable financial prowess to thrive in economic cycles and outperform their high dividend peers through an extended holding horizon.
Performance Sources: Morningstar and Zephyr
Valuation Driven Investment Process
Valuation Driven Investing begins and ends with calculating the intrinsic value of every stock in a benchmark against which a portfolio is constructed, and comparing those values against traded prices. The undervalued securities identified from this process are then evaluated on the basis of additional proprietary Applied Finance metrics and/or an analyst team to determine the securities most likely to outperform the benchmark. In addition to valuation, Applied Finance has identified Management Quality, Earnings Quality, Operating Momentum, and Price Momentum as additional important factors to explain future stock returns.
The Valuation Dividend is an investment portfolio designed to track the performance of a basket of stocks selected by Applied Finance. The Valuation Dividend is a copyrighted product of Applied Finance, and may not be reproduced or used in any manner whatsoever without the prior express, written consent of Applied Finance.
Performance numbers represent past performance and may not be indicative of future returns. Performance is net of fees and assumes reinvestment of all dividends and capital gains. Past performance is no guarantee of future results.
References to stocks held in the Valuation Dividend are for informational purposes only and do not constitute and offer to buy or sell any security.
The information and data contained in this presentation were obtained from sources deemed to be reliable, but Applied Finance makes no guarantee as to the accuracy or completeness of any such information or data.