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Dividend champions offer stability plus performance

13.11.2023

 

Portfolio Manager Sergej Shelesnjak von Lupus alpha über die wichtige Dividenden-Kontinuität

Why are you focussing on dividend champions?

Companies that qualify as dividend champions are quality stocks in every respect. Their dividend payments reflect a stable growth trajectory that supports the long-term performance of their share price. The focus on high dividend quality combines the opportunity for good share performance with a reassuring feeling: that the company is very likely to make a solid profit again in the coming year and pay out a portion of it.

What makes a dividend champion for you?

The five most important characteristics include profit, cash flow, appropriation of profits, transparency and continuity. The dividend yield does not play a role in our evaluation process. We tend to see an extremely high value as a warning signal, especially if it has arisen due to high selling pressure on the share.

In terms of profit, it should be noted that only around half of the profit is distributed as a dividend; higher values suggest a rather unsteady future. When it comes to cash flow, there is basically nothing worse than dividend payments from the substance of a company or, even worse, from new debt. And a transparent dividend policy must clearly regulate the amount of profit distribution.

However, our top characteristic of a dividend champion is dividend continuity. In the best case scenario, the dividend increases over the long term in line with the growth rate of the company's profits, without any interim losses. This is how we find companies that have strong business models and solid balance sheets that enable them to survive crises largely unscathed.

 

And how do you integrate this into your fund, the Lupus alpha Dividend Champions?

European small and mid caps offer active stock pickers like us an enormous variety of sectors and companies. Thanks to our characteristics of stable sales development, solid net income, dividend continuity and low debt - all of this over the last 10 years - we reduce the large universe to around 130 stocks. From the remaining companies, we select the best 30 or so companies for our concentrated portfolio. The special thing about this is that our large Small & Mid Caps team meets with around 1,500 companies in person every year. This means that we know every company we invest in personally! This sets us apart from many other providers.

3 arguments in favour of the Lupus alpha Dividend Champions 

  • Dividend quality characterises solid quality companies that should continue to generate solid profits in the future.
  • By focussing on dividend continuity, dividend champions can be found that are stable through crises and can even emerge stronger from recessions.
  • After screening, the portfolio management of Lupus alpha Dividend Champions selects the most promising, crisis-resistant quality companies with the help of fundamental analyses and extensive company discussions.

 

This fund information is provided for general information purposes. This information is not designed to replace the investor‘s own market research nor any other legal, tax or financial information or advice. The information presented does not constitute an invitation to buy or sell or investment advice. It does not contain all key information required to make important economic decisions and may differ from information and estimates provided by other sources or market participants. We accept no liability for the accuracy, completeness or topicality of this information. All statements are based on our assessment of the present legal and tax situation. All opinions reflect the current views of the portfolio manager and can be changed without prior notice. Full details of our funds and their licenses of distribution can be found in the relevant current sales prospectus and, where appropriate, Key Investor Information Document , supplemented by the latest audited annual report and/or half-year report. The relevant sales prospectus and Key Investor Information Documents prepared in German are the sole legally-binding basis for the purchase of funds managed by Lupus alpha Investment GmbH. You can obtain these documents free of charge from Lupus alpha Investment GmbH, P.O. Box 11 12 62, D-60047 Frankfurt am Main, upon request by calling +49 69 365058-7000, by emailing service@lupusalpha.de or via our website: www.lupusalpha.de. If funds are licensed for distribution in  Austria the respective sales prospectus, Key Investor Information Document and the latest audited annual report or half-year report are available from the Austrian paying and information agent UniCredit Bank Austria AG based in A-1020 Vienna, Rothschildplatz 1. Fund units can be obtained from banks, savings banks and independent financial advisors.

Neither this fund information, nor its contents, nor any copy thereof may be sent to third parties, changed in any way or copied without the prior written consent of Lupus alpha Investment GmbH. By accepting this document you agree to comply with the provisions above. Subject to change without notice.

Lupus alpha Investment GmbH 
Speicherstraße 49–51 
D-60327 Frankfurt am Main 

 

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Pia Kater
Press officer, Communications
+49 69 / 36 50 58 - 7401
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Pia Kater
Press officer, Communications
+49 69 / 36 50 58 - 7401
to our press area