Rising Dividend Portfolio

Some of our clients need income. Some of them need growth. Many need income that will grow over time. Each portfolio that DCM offers is designed not to produce the highest possible return, but with an awareness of how it can best fulfill the important needs of our client.

Cornerstone

An investment style using common stocks in financially strong companies that provide generous income and stability by paying above-average and ever-increasing dividends (overall portfolio yield more than twice the average of the S&P 500).

DCM's Cornerstone investment style focuses on financially strong companies with dividend yields higher than the average for the S&P 500. These companies must also be consistently and significantly growing their dividends.

One of the reasons the stock markets lost their way in the late 1990's and early 2000's was because valuing companies solely on the basis of earnings proved to be unreliable. Valuing stocks on the basis of dividends, however, is very similar to valuing a bond, which is intuitive and a function of reasonably simple math. The Cornerstone approach is one that makes sense, has a long track record of success, and has a quantifiable nature that roots it in common sense.

The companies we own in Cornerstone have such a long record of consistently increasing their dividends that, by using regression analysis, we can estimate with a high degree of confidence what their dividend will be five or ten years from now. This cannot be done for all stocks, but we can do it for companies that raise their dividends consistently year after year.

Capital Builder

A management style seeking long-term appreciation through large and mid-cap companies who place their emphasis on growth yet continuously increase their dividends (overall portfolio yield similar to the average of the S&P 500).

Like DCM's approach to all investing, the process for our Capital Builder management style begins by narrowing the universe to companies of only the highest quality and financial strength. These companies typically have developed an ability to produce consistent and impressive earnings growth, and they share those earnings with their shareholders through every-increasing dividends. While the dividend yield may not be as generous as that found in our Cornerstone or Income Builder portfolios, the dividends typically grow at a much faster rate.

This style of management is for investors whose life situations enable them to assume the risk and volatility of investing in stocks in exchange for the potentially higher rewards of long-term capital appreciation. Current income will be modest but growing at a rate approximately equivalent to earnings growth.

Income Builder

An investment style for clients in need of higher income that will keep up with inflation. This portfolio focuses on companies with dividend yields two to four times higher than the average stock.

Many companies in mature, slower growing industries and in situations where the regulations require they do so, pay out exceptionally large portions of their earnings (in the form of dividends) to their shareholders. These stocks create a wonderful opportunity for clients who need more income. Through Income Builder, we are able to trade off some of the future growth for very generous dividend income today.