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

"We believe consistent and robust dividend growth is a likely marker for earnings growth, good corporate governance and a resilient business model."

Fund Commentary

Quarterly Fund Commentary September 30, 2020

  • US equity markets rose consistently through July and August before generally trading down from an early September record high, due in part to rotation out of previously top-performing technology bellwether stocks. Aided by policy maneuvers and financial aid programs, the US economy began to pull out of a pandemic downturn. The economy’s resilience and adaptability sparked a second consecutive quarter of robust gains for nearly all equity sectors, some of which returned to positive territory year-to-date.
  • For the quarter, the fund’s Advisor Class shares returned 9.64%, and its benchmark, the S&P 500 Index, returned 8.93%. Past performance is not an indicator or a guarantee of future performance.

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Important Legal Information

The information provided is not a complete analysis of every material fact regarding any country, market, industry, security or fund. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this material and may change without notice. A portfolio manager’s assessment of a particular security, investment or strategy is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy; it is intended only to provide insight into the fund’s portfolio selection process. Holdings are subject to change.

Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. They should read the summary prospectus and/or prospectus carefully before they invest or send money. To obtain a prospectus, which contains this and other information, please call Franklin Templeton at (800) DIAL BEN/(800) 342-5236.

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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 (except for utility companies), and
  • Strong balance sheets
    • Long-term debt less than 50% of total capitalization (except for utility companies), or
    • Investment-grade senior debt

Additionally, the investment manager utilizes a comprehensive suite of valuation tools in seeking investments which trade below the investment manager's view of intrinsic value.

Investment Approach

Our quantitative screens for dividend growth and valuation metrics reduce our investable universe from 10,000+ companies to typically 250 to 300 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 09/30/2020

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 09/30/2020

Years Ratings Funds
in category
3
3 Stars
1229
5
4 Stars
1066
10
3 Stars
819

Morningstar Style Box As of08/31/2020

Strategy, Benefits, Results

Strategy

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 (except for utility companies), and
  • Strong balance sheets
    • Long-term debt less than 50% of total capitalization (except for utility companies), or
    • Investment-grade senior debt

As a fundamental investor focusing on individual securities, the investment manager looks for companies that it believes meet the criteria above, trade below their intrinsic value and are fundamentally sound, and attempts to acquire them at attractive prices.

Benefits

  • Diversification. We invest in companies across the entire market-cap spectrum, with a variety of industries and sectors.
  • Focus on High-Quality Companies. 
  • Leverages both the research resources of Franklin Equity Group and a dedicated team focused on dividend growth investing.