Fund Description

The fund seeks long-term capital appreciation by investing at least 80% of its net assets in companies of any size that have paid consistently rising dividends.

Strategy Statement

"Using a rigorous, research-driven stock selection process, we only consider a company if it passes our five screens and then only buy if they are attractively priced relative to historical valuations."

Management

Nicholas Getaz, CFA

Nicholas Getaz, CFA®

  • Joined Franklin Templeton in 2011
  • Managed Fund Since 2014
Matt Quinlan

Matt Quinlan

  • Joined Franklin Templeton in 2005
  • Managed Fund Since 2019
Amritha Kasturirangan, CFA

Amritha Kasturirangan, CFA®

  • Joined Franklin Templeton in 2009
  • Managed Fund Since 2019
Nayan M Sheth, CFA

Nayan M Sheth, CFA®

  • Joined Franklin Templeton in 2014
  • Managed Fund Since 2019

INVESTMENT PHILOSOPHY, STRATEGY AND APPROACH

The Fund Invests Primarily In Companies That Have:

  • Consistent dividend increases
    • At least 8 out of 10 years
    • No dividend decreases during that time
  • Substantial dividend increases
    • At least double over last 10 years
  • Reinvested earnings
    • Paid out less than 65% of current earnings in dividends
  • Strong balance sheets
    • Long-term debt less than 50% of total capitalization
    • Investment-grade senior debt
  • Attractive prices
    • Prices at the time of purchase either in the lower half of the stock’s Price/Earnings ratio range for the past 10 years or less than the average current market Price/Earnings ratio of the stocks comprising the Standard & Poor’s 500® Stock Index

Investment Approach

Our quantitative screens for dividend growth and valuation metrics reduce our investable universe from 10,000+ companies to +/- 250 qualifiers. Leveraging both the research resources of Franklin Equity Group and a dedicated team focused on dividend growth investing, we conduct bottom-up fundamental analysis to identify 50-70 high conviction companies which we believe will meet our investment criteria going forward. Our analysis includes an assessment of material Environmental, Social, and Governance material (ESG) factors.

 

Rating

Overall Morningstar Rating As of 10/31/2019

Rating Category: Large Blend

Morningstar
The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating As of 10/31/2019

Years Ratings Funds
in category
3
3 Stars
1198
5
3 Stars
1058
10
4 Stars
801

Morningstar Style Box As of09/30/2019

Strategy, Benefits, Results

Strategy

We employ a unique, disciplined approach to stock selection. Companies must meet the following criteria before stocks are considered for purchase:

  • Consistent Dividend Increases. We only consider companies that have increased their dividend in at least 8 out the last 10 years, without a decrease.
  • Substantial Dividend Increases. We look for companies that have doubled their dividend over the last 10 years.
  • Strong Balance Sheets. We invest in companies with strong financials and low levels of long-term debt.
  • Reinvested Earnings for Future Long-Term Growth. We search for companies that reinvest at least 35% of their earnings in their own future growth.
  • Attractive Price. We purchase shares that are attractively priced relative to historical valuations and stocks must have a price-to-earnings ratio (P/E) in the lower half of its range over the last 10 years or less than the current P/E ratio of stocks in the S&P 500 Index.

Benefits

  • Diversification. We invest in companies across the entire market-cap spectrum, with a variety of industries and sector.
  • A Record of Lower Volatility.
  • Value Expertise. Investors can benefit from our veteran management team with extensive value investing experience.

Selling The Fund

  1. Point out the manager’s value expertise and management team’s long tenure and fund’s track record.

  2. Highlight our rigorous stock selection approach that only considers quality companies that have a history of increasing their dividends.

  3. Emphasize the broad market exposure to companies across all cap sizes, sectors and industries.