U.S. Dividends: A Growth Runway

Franklin U.S. Rising Dividends Fund

Franklin U.S. Rising Dividends Fund invests in companies with a track record of substantial and sustainable dividend growth. Corporations that grow their dividends tend to experience greater long-term stock price appreciation compared to firms that just maintain their dividends or don’t pay any at all.

This fund has a portfolio of equities of quality, dividend-growing U.S. companies. The portfolio has demonstrated that it can participate in market growth and protect investor capital against downside risk.

We seek to invest in the most promising companies with attractive valuations and those companies with long records of dividend increases and solid performance.

Franklin U.S. Rising Dividends Fund is actively managed as a core U.S. equities strategy for investors interested in U.S. exposure but concerned about volatility & timing uncertainty.

A Distinct Stock Selection Process

Consistent Divident Increases

May be evidence of a resilient business model/product line

Substantial Dividend Increases

Often a hallmark of ample and growing free cash flow

Reinvested Earnings for Future Growth

Potential source of long-term sustainable growth

Strong Balance Sheet

Low debt servicing cost may enable increased return of capital to shareholders

Attractive Price

‘Value Overlay’ makes us opportunistic/bargain hunters

MANAGER INSIGHTS

U.S. Dividends Outlook: Where do we go from here? - Webinar Key Takeaways

In our latest webinar, Franklin Equity Group Portfolio Managers Nick Getaz and Matt Quinlan share where they are finding opportunities for the Franklin U.S. Rising Dividends Fund.

Key Resources

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THE PORTFOLIO: QUALITY, GROWTH, CONSISTENCY

The fund managers seek to invest in U.S. equities of resilient companies with consistent and robust dividend growth for their long-term capital appreciation.

Top 10 Holdings have Raised Dividends Annually for 20+ Years on Average

As of August 31, 2020

Holding NameWeightingDividend YieldYear Over Year
Dividend Increase
10-Year Average
Annual Dividend
Increase
Consecutive
Annual
Increase
Microsoft Corp 9,09 % 0,90 % 11 % 15 % 16
Roper Technologies Inc 5,43 % 0,48 % 11 % 18 % 27
Accenture PLC 3,94 % 1,33 % 10 % 8 % 15
Linde PLC 3,91 % 1,54 % 10 % 8 % 27
Air Products & Chemicals Inc 3,81 % 1,83 % 16 % 11 % 37
Stryker Corp 3,35 % 1,16 % 11 % 14 % 27
West Pharmaceutical Services Inc 3,27 % 2,23 % 7 % 7 % 27
Texas Instruments Inc 3,12 % 2,53 % 17 % 22 % 16
Becton Dickinson And Co
2,90 % 1,30 % 3 % 8 % 48
Analog Devices Inc 2,83 % 2,16 % 8 % 10 % 42

RISING DIVIDENDS, HIGHER RISK-ADJUSTED RETURNS

Historically, equities of dividend-growing companies performed better with less risk.

The chart shows that the dividend growers delivered strong performance with less risk than the S&P 500 Index over the 30-year time period ended June 30, 2020. This period featured multiple market cycles and downturns, including the Dot-Com collapse, Global Financial Crisis and “The Lost Decade,” the 10-year period ended in 2009 when U.S. equities (represented by the S&P 500 Index) had a near-zero return.

S&P 500 Index Stocks by Dividend Policy1

30-Year Period Ended August 31, 2020

MANAGING RISK WITH DIVIDENDS

  1. Source: Ned Davis Research Group, Inc. Indexes are unmanaged, and one cannot invest directly in an index. Index returns do not reflect any fees, expenses or sales charges. Indexes represent the dividend and non-dividend-paying stocks of the S&P 500 Index, which is calculated using monthly equal-weighed geometric averages of the total returns of all dividend-paying stocks and non-dividend-paying stocks. The S&P 500 Index is considered representative of the U.S. stock market and reruns do no reflect the deduction of fees or sales charges. Risk is measured by annualized standard deviation. Performance data represents past performance, which does not guarantee future results
  2. Source: © 2020 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.