Large Cap Value
Investment Objective:
- Provide high current income
- Provide less volatility than the equity market
- Provide the potential for capital appreciation and increasing income
Philosophy
The Morgan Dempsey Large Cap Value Strategy invests in a diversified portfolio of equity securities. We attempt to identify and invest in companies that pay attractive current dividends and have historically raised the dividends paid to shareholders.
This portfolio is not necessarily broadly diversified and tends to be concentrated in sectors where we can find yield. We attempt to find companies that in addition to the high current dividend, are trading at or near their historical dividend yield.
Given the primary objective is yield, we tend to hold many of these securities longer term and this portfolio has historically experienced relatively low turnover. Stocks are normally sold when the dividend yield reaches a level that we no longer consider attractive. Stocks are also sold when, in our opinion, the company experiences some fundamental deterioration in earnings or earnings outlook.
We look for companies with the following characteristics at the time of purchase:
- Market Capitalization > $5 billion
- Dividend yield 1% higher than the S&P 500
- A commitment to dividends and dividend growth
- Solid dividend coverage
- Sustainable business model
What Investors Should Expect:
- High current income
- Potential for increasing portfolio income
- Potential for total returns consistent with value oriented portfolios
- Volatility associated with concentration in higher yielding sectors of the market
- Long-term investment perspective
