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DAC Insights – The Case for Dividend Growth Investing - Pat Soldano

Regardless of how thorough the analysis or how accurate the economic forecasting, how well an investment performs on paper cannot compare to its performance in the real world. It’s the difference between theory and reality. To that end, DAC’s three-dimensional investment approach provides a more dependable, repeatable pattern of consistent performance, total returns, and, importantly, income growth for long-term investors.

 

Our Proprietary Investment Philosophy3-D Investing

Dividend Assets Capital (“DAC”) was built on a pioneering, 40+ year legacy of dividend growth investing that we call the 3-D process… “Double-digit, Dividend Growth for a Decade or More.” We believe companies that pay and increase their dividends substantially and consistently, year after year, tend to perform uncommonly well for reasons beyond their dividends alone.

At DAC, we believe in the power of long-term investment strategies. Our dividend growth investment philosophy, which spans a decade or more, is not just a preference, but a prerequisite for our portfolio of investment companies. This philosophy serves as a safeguard for our clients’ investment portfolios, ensuring stability and consistent growth over time.

For a company even to be considered for one of DAC’s client portfolios, it must have a proven track record of:

  1. Consistent Dividend Growth – This means that all of our investment companies must consistently raise their dividends, thereby demonstrating that they are capable of generating an increasing stream of income distributions for their shareholders each and every year.
  2. By Double Digits – We invest exclusively in companies with economic strength and capital discipline to grow their dividends, on average, by at least 10% or more.
  3. For a Decade or More – All of our investment companies must demonstrate the ability to consistently maintain this double-digit income growth for at least 10 years. Many of our investment companies have continued this growth for decades.

Once DAC has identified that a company meets this rigorous dividend criterion, our team of investment professionals begins the process of identifying and constructing a well-diversified portfolio of high-quality U.S. and international companies that offer a combination of earnings growth, cash flow sustainability, reasonable financial leverage, and consistently growing dividends. While many of these investments tend to be large, well-established companies with demonstrated competitive advantages, our Equity Strategy also offers the added diversification of investing in many small and mid-size companies as well.

https://dacapitalsc.com/strategies/

One benefit of our proprietary investment process is flexibility. As a boutique investment firm, we can customize any of our portfolios to meet a client’s individual needs, whether that is higher income, tax considerations, or adjustments for risk tolerance.

Asset & Income Growth

Since its founding over 20 years ago, DAC has mastered the process of combining high-quality companies that pay sustainable and growing dividends into portfolios that provide at least two significant benefits for investors… long-term capital appreciation AND a rising stream of portfolio income. Most conversations about portfolio performance focus on total return. However, we believe income growth is an equally important investment outcome, and it is often both underappreciated and overlooked, even by experienced investment professionals.

Examining the results over the last decade of DAC’s Equity strategy demonstrates how both outcomes can be achieved from a single investment approach. The chart below illustrates how a $500,000 investment in a representative DAC Equity portfolio on 3/31/2014 grew to $1,346,914 ($1,288,885 net of DAC’s management fees) over 10 years. With regard to income growth, the bar chart below shows how annual income increased in the same representative portfolio, from $9,046 to $26,847 over the same 10-year period, producing income at an average annual growth rate of 12.1% – well ahead of inflation.

https://dacapitalsc.com/dac-insights-asset-and-income-growth/

DAC Insights – The Case for Dividend Growth Investing Whitepaper

About Dividend Assets Capital
100% Employee-owned boutique wealth and investment firm based in the heart of South Carolina’s Lowcountry. By combining our 40-year tried and true dividend growth investment philosophy with our diverse, well-seasoned planning and advisory acumen, we deliver highly personalized investment strategies and comprehensive wealth management services for the benefit of our clients. We bring clarity, simplicity, and devotion to our work, helping successful families, advisors, and institutions achieve their financial goals so they may preserve what is meaningful to them, their families, and their communities.

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