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.
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