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Dividend Growers Portfolios

Endeavor Wealth Management constructs, monitors and manages three Tactical US Equity Portfolios based on a Dividend Growth Methodology.  The portfolios are Large Cap Dividend Growers, Mid Cap Dividend Growers, Small Cap Dividend Growers,

The starting point for the three Dividend Grower based portfolios are based on a stock screen of Dividend Growers.  What is a Dividend Grower – Large Cap companies that have had a minimum of 25 years of consecutive dividend growth; Mid Cap companies that have had a minimum of 15 years of consecutive dividend growth, Small Cap companies that have had a minimum of 10 years of dividend growth.   Companies that have grown their dividends consistently tend to be high quality with long histories of profit, long histories of growth, strong fundamentals and stable earnings.  Bottom Line is screening for quality has led to outperformance.  So, does it work? 

Historically, companies that grew dividends have outperformed, with lower volatility:

                                                            Performance                                     Volatility

Dividend Growers                                13.8%                                                    14.5%

Dividend Non-Changers                      10.1%                                                    17.0%

Dividend Non-Payers                            7.4%                                                     24.3%

Dividend Cutters                                    6.6%                                                     22.3%


Once the stock universe has been identified, Endeavor Wealth Management applies an additional proprietary technical screen to identify the strongest and more importantly avoid the weak.  Theoretically, if we take a time-tested stock screening methodology – Dividend Growers, and then avoid the underperformers we potentially have a more technically sound portfolio.


Finally, Endeavor Wealth Management also provides a degree of risk management to protect the portfolio in the event of significant or prolonged market downturns.  As stocks begin to give technical sell signals, if there are not enough stocks on a technical buy signal you will see positions go to cash and remain there until market conditions improve.  This gives the portfolio a degree of catastrophe insurance not available in a long only strategy. 

Source: Ned Davis Research, based on an analysis of Russell 3000 stocks from 1/31/1987 – 12/31/16.  Results of a hypothetical portfolio of $100 in stocks in the United States, divided into:  Dividend Growers (dividends per share increased); Dividend Non-Changers (no change in dividends per share); Dividend Non-Payers (no dividends paid); Dividend Cutters (dividend per share decreased).  Dividend activity measured over trailing 12 months.  Assumes dividends reinvested and all are equally weighted.  Past performance does not guarantee future results.  Volatility refers to standard deviation, a statistical measure that captures the variations from the mean of a stock’s returns and that is often used to quantify risk over a specific time period.  The higher the volatility, the more returns fluctuate over time.