SEPTEMBER 2019

Best Dividend Fund

Managers and Their
Top Holdings
January 2020
 Contents
Introduction 3

Research Methodology 6

Contents — Best Dividend Fund Managers & Their Top Holdings

Best Dividend Fund Managers 9

Honorable Mentions 13

Top Dividend Stocks 15

page 2
 Introduction

A stock dividend is something tangible

– it’s not an earnings projection; it’s
something solid, in hand. A stock dividend
is a true return on the investment.
Everything else is hope and speculation.”
Richard Russell
Dow Theory Letters author Richard Russell the hype. And yet, receiving a steady
might be onto something with that quote. cash payment from a portfolio’s holdings
These days, stocks seem to be trading can do wonders for returns. It’s here that
with a mind of their own. Earnings and losses can be turned into gains and flat
revenue estimates appear to be all over markets can produce a real return.
the place as analysts try to quantify all

Introduction — Best Dividend Fund Managers & Their Top Holdings

the uncertainty in the world. And there If you need proof, just look at the so-called
certainly is a lot of it. From conflicts in the “Lost Decade.” While the markets have
Middle East and geopolitical concerns in spent much of the last ten years surging
Europe to slowing economic data here at higher, that wasn’t the case previously.
home, the world’s economy isn’t exactly Thanks to both the bursting of the dot-
a slam dunk these days. “Cautiously com bubble and the Great Recession,
optimistic” remains a rallying cry for many between 2000 and 2009, the S&P 500
traders and analysts, which has produced produced a negative price return over
plenty of volatility, large swings and that time. However, thanks to dividends,
potentially higher-than-historical valuations the actual total return was closer to 2%.
in many pockets of the market. And the And that return was even greater when
companies that get it wrong are being accounting for dividend reinvestment.
punished severely.
And with today’s market looking awfully
But the solution for financial advisors and similar to both the Great Recession and
their clients lies within Russell’s quote. dot-com bubble era in many regards,
Dividends are something tangible. In the dividends could prove their mettle once
current environment, that cash payment again. They simply cannot be glossed
is exactly what portfolios need in this over by financial advisors or individual
day and age. It’s getting harder to value investors. Which brings us to Dividend.
stocks, and returns may not live up to com’s updated report.

page 3
A Look at Best Dividend Fund the fund segment. This is critical, as
Managers & Their Holdings the vast majority of active mutual fund
managers continue to underperform the
With an eye towards finding tangible broader market and their benchmarks.
returns in the current market For advisors and their clients to be
environment, Dividend.com has updated successful, we need to figure out which
its list of the top dividend mutual funds funds are actually winning and worth
and their underlying holdings. By paying fees for. This is especially true
reading the latest edition of the report, when markets are hard to value today.
financial advisors and investors need to
reacquaint themselves with the power Our updated report once again combs
and purpose dividends have in such through the haystack and finds the
constrained and interesting investing proverbial needle for those mutual funds
environments. and managers that have continued to
conduct dividend investing the right
With literally thousands of active mutual way, beat their benchmarks and do right
funds currently on the market and by their shareholders. Better still, the
hundreds of those having an equity report will once again unlock the secret
income or dividend mandate, Dividend. ingredient to their successes – the
com has come up with a proprietary top stocks that propel their managed
system to help identify which managers portfolios higher.
have been successful in navigating

Introduction — Best Dividend Fund Managers & Their Top Holdings

page 4
Building A Better Dividend Portfolio Shifts in sentiment, changes in leading
sectors and overall risk profiles can
For financial advisors and retail investors be examined by advisors and clients.
going it alone, our new report can be a Here, they can exploit this information in
vital tool in overall portfolio construction. order to build their own custom portfolio
and adapt their goals for today’s
As we enter a period of relative market environment.
uncertainty and the days since the
last downturn grow longer, finding the This includes individual stock selection
right professional touch is critical. Only as well. Advisors and investors can learn
when the tide goes out do you discover how various factors – such as quality,
who’s been swimming without a bathing momentum, value, debt levels and
suit. These days, you need to find the size – have contributed to the returns
stewards of your or your clients’ hard- of the top fund. With that information,
earned cash and managers that have investors can then eliminate much of
the returns to back up their costs. And the headache of trying to figure it out
that’s just what you get with our report. alone. Afterall, if the top market-beating
We’ve done much of the legwork for funds have been able to exploit this
you in selecting a top dividend mutual information, you can too. And knowing
fund to use or compliment a portfolio. this information cuts down on research
This fact could be the make-or-break time and allows investors to act
selection in the current period of the accordingly to suit their own needs.
hard-to-value market.
All in all, Dividend.com’s updated report
Secondly, our report provides some continues to provide valuable knowledge
powerful insights to the state of in how winning managers build top
the market and economic trends dividend portfolios. Whether financial
themselves. With the update, readers advisors and individual investors choose

Introduction — Best Dividend Fund Managers & Their Top Holdings

can see which holdings are doing to pay the pros or mimic their strategies,
well and how the top funds have the report is a necessity to get back into
adjusted to the current environment. dividend investing.

A Great Resource for However, finding great dividend stocks

Dividend Payers – and the mutual funds that track them
– can be a real challenge. Our new
As we enter a period of unknowns and report makes that challenge disappear.
valuations continue to perplex many By reading it and following the updates,
analysts, finding managers who have financial advisors and investors alike
done right by their clients is becoming can get a leg up on the competition
even more important. and spend more time collecting
dividend checks.

page 5
 Research Methodology

As the economic situation turns sour In order to find those top-tiered

and the bull is on its last legs, dividends managers and the stocks that they
will once again shine bright for investors. own, we’ve come up with a system
But not every dividend stock or manager that uses a proprietary ranking
is as good as gold. This is especially true methodology to uncover which funds
when the tide goes out. And academic are the best as well as what stocks
research shows most active mutual have driven those returns over the
funds underperform their benchmarks. last yearly period. By doing so, we at
Dividend.com can hone in on the right
To that end, finding the right managers mutual funds and holdings with the
and stocks that focus on the dividend potential to produce great results for
market segment are vital. clients and individual investors.

Identifying the Top with a fund’s goals. Terms like “growth

Fund Managers & income” can be very subjective
to individual managers and asset
There are a lot of mutual funds out there.

Research Methodology — Best Dividend Fund Managers & Their Top Holdings
administrators. In order to focus strictly
In fact, there are more than 9,300 to on dividends, we look at the prospectus
be exact. Combing through that huge for a mutual fund’s investment objective/
expanse of available funds can be a lot principal investment strategies. This
of work, especially when you’re trying gives a clear picture of what the fund and
to dial in to specialty funds like equity its managers are looking for. Here, we
income. Which is why we’ve come up narrow down our universe to those funds
with our system. that state that they invest in primarily
dividend-paying stocks and state that
To start with, we break that universe current income, dividend growth or a mix
down to mutual funds that solely focus of both are their focus.
on owning equities. While that may seem
obvious, there are a lot of hybrid funds From here, we shrink our universe a
designed to give the returns of stocks but bit further by removing esoteric and
use other instruments instead to achieve specialized shares classes such as those
this goal. That’s not something we’re reserved for retirement or 529 accounts.
after for this report. These share classes are often not
investable for the retail investors or are
Once we have a base of equity funds, only available to specialized registered
we dig in to find funds that focus accounts. Additionally, we kick out mutual
on dividends. The way we do this funds that are closed to new investors.
is by combing through mutual fund There’s no reason to include them if we
prospectuses. Fund names don’t can’t get advisors or individuals to buy
often tell the real story or match up them.

page 6
Now that we have our fund universe of benchmark for equity income funds.
equity income funds, we start digging Those funds with a trailing one-year total
into numbers. return greater than 23.11% are included.

To ensure the quality and staying power of Finally, from this list of funds, we sort
funds, we only look at mutual funds with the winning mutual funds by their one-
a minimum of $5 billion in assets. Mutual year total returns. We chose this one-
funds are prone to closure. Those funds year mark as the criteria, as we wanted
with high assets under management have to showcase mutual funds that have
stood the test of time and statistically will performed well in the current market as
be around for the long haul. Secondly, well as the recent past. By sorting for
we want to make sure that these funds trailing one-year returns, we get a good
are actually producing real returns. We picture on recent performance. A mutual
compare these funds with the trailing fund can have a good 20-year track
one-year return (as of December 31, 2019) record but a poor current one. From
of the Dow Jones U.S. Select Dividend here, we select the top ten funds and
Total Return Index, which is the main identify their managerial teams.

Research Methodology — Best Dividend Fund Managers & Their Top Holdings
A Look at the Top Fund returns. Next, we calculate the number
Stock Picks of times (i.e. instances) these stocks
appear within the top ten holdings of
Mutual funds hold assets by definition. each of the top ten mutual funds. If
And it’s those assets that drive the two different dividend managers have
fund’s returns. For the top mutual funds, a huge stake in the same stock, it
we want to see exactly what makes probably means that the stock has the
them tick. Better still, if they have any right ingredients for success. And given
common ingredients that make them that dividends represent a tangible
great. Under that guise, our updated return, the correct ingredients are
report looks into their holdings. particularly important.

After identifying the top ten dividend- From here, we sort the list of stocks by
focused mutual funds, we look at each their instances, as described above, and
of their top ten holdings. Historically, the choose the top five stocks as the secret
top holdings of a fund are those with the ingredients driving returns.
most assets and the primary drivers of

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 Research Methodology — Best Dividend Fund Managers & Their Top Holdings
A Prime Methodology for Results this can provide plenty of insight into
market conditions and what stocks are
By using these rules to help select the doing well for the long haul. By using
top managers and their holdings, our this information, advisors and individual
quarterly report can show which funds investors can steer their own portfolios
are leading and which are lagging, as or place their bets on someone who is
well as how they are changing their getting it right.
portfolios. As we said in the introduction,

page 8
 Best Dividend Fund Managers*

1. ClearBridge Dividend Strategy IS (LCBEX)

Managers: Michael Clarfeld, Peter Vanderlee, Scott K. Glasser, John Baldi

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

SOPYX
SOPAX
31.34 6.81 25.55 1.23 0.68 SBPLX 5.9
LCBOX
LBRIX

Seeking a combination of current dividend income, dividend growth and long-term capital
appreciation is the mission behind LCBEX. Lead Portfolio Managers John Baldi and Michael
Clarfeld accomplish this goal by using various fundamental analysis data points to pick stocks for
the fund, including factors like value, P/E and revenue growth projections. These fundamental
screens have allowed the fund to rack up an impressive 31.34% in total return over the last year.
The fund currently yields 1.23% and charges 0.68% in expenses.

Best Dividend Fund Managers — Best Dividend Fund Managers & Their Top Holdings
2. Pioneer Y (PYODX)
Managers: John A. Carey, Jeffrey L. Kripke, Craig Sterling, James Yu

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

PIODX
31.31 5.36 29.58 0.75 0.77 9.7
PCODX

Proving that environmental, social and governance (ESG) investing doesn’t mean sacrificing
returns is PYODX. The fund scours the U.S. large-cap landscape for stocks with quality income
and capital return potential. However, the kicker is that Lead Manager Jeff Kripke and his team
then integrates ESG analysis into its investment process. Running screens that hone in on
companies with sustainable business models as well as integrating ESG-related risks into their
investment thesis, PYODX creates a portfolio of top ESG income names. The strategy works.
The fund managed to provide a total return of 31.31% over the last 12 months. Expenses run a
reasonable 0.77% and the fund yields 0.75%.

*All data presented in this section is as of December 31, 2019.

**Each share class available for a fund has different fees and expense structures, but all of the share
classes for a particular fund invest in the same securities and have the same fund managers. page 9
3. T. Rowe Price Dividend Growth I (PDGIX)
Manager: Thomas J. Huber

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

PRDGX
31.16 14.80 53.32 1.23 0.51 19.8
TADGX

PDGIX continues to be a top dividend fund. The last 12 months has been no different, with a
31.16% total return. The secret continues to be the firm’s “growth at a reasonable price” mantra.
Lead Manager Thomas J. Huber expands upon that mantra into the world of dividend-paying
stocks. With the belief that a track record of dividend increases is an excellent indicator of financial
health and growth prospects, Huber focuses on stocks that hold a strong track record of paying
dividends. Its focus on dividend growth continues to pay long-term benefits for shareholders. With
low expenses at 0.51% and a strong 1.23% yield, PDGIX remains a top choice for portfolios.

4. Parnassus Core Equity Institutional (PRILX)

Managers: Todd C. Ahlsten, Benjamin E. Allen

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

30.96 18.66 47.03 0.68 0.63 PRBLX 13.2

Best Dividend Fund Managers — Best Dividend Fund Managers & Their Top Holdings
Also winning on the ESG front is PRILX. Manager Todd C. Ahlsten’s main focus continues to be
high quality U.S. companies that have a relatively narrow range of expected investment outcomes.
This focus on “quality” extends to various ESG metrics designed to limit losses during market
downturns. It also works very well during rising markets. This is evident by PRILX’s 12-month total
return of 30.96%. While the headline yield of the fund is low at 0.68%, dividends are still a major
portion of the fund’s quality screens. Expenses run at 0.63% for PRILX.

5. Putnam Equity Income Y (PEIYX)

Managers: Darren A. Jaroch, Walter D. Scully, Lauren B. DeMore

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

PEYAX
PEQNX
30.24 13.44 26.46 1.31 0.66 5.0
PEIMX
PEQCX

“Patient and disciplined” is how Lead Portfolio Manager Darren A. Jaroch sums up his investment
style at PEIYX. Having a value tilt, Jaroch looks for U.S. value stocks that often are priced below
their long-term potential and could possibly have a catalyst for positive change. With this value
tilt comes a hefty dose of dividend growth and income potential. Now that value is once again
becoming in vogue with investors, PEIYX’s returns have blossomed. The fund has managed to
post a 30.24% 12-month total return and currently yields 1.31%. Expenses for PEIYX clock in at
0.66%.

page 10
6. TIAA-CREF Growth & Income Institutional (TIGRX)
Manager: Susan Kempler

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

TIIRX
TRPGX
30.23 6.83 20.55 0.74 0.40 14.8
TGIHX
TGIWX

Focusing on a strong total return, TIGRX’s Fund Manager Susan Kempler looks for U.S. stocks
that offer both a strong income profile and the potential for capital appreciation. Kempler and her
team also pay particular attention to those firms that are leaders in the fields with competitive
advantages. This focus on deep moats has helped TIGRX produce top-notch returns throughout
its history, and over the last 12-months, the fund has made investors 30.23% in total return. TIGRX
yields 0.74% and costs just 0.40% to own.

7. Franklin Rising Dividends Adv (FRDAX)

Managers: Nicholas P.B. Getaz, Matthew D. Quinlan, Amritha Kasturirangan, Nayan Sheth

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

Best Dividend Fund Managers — Best Dividend Fund Managers & Their Top Holdings
FRDPX
30.19 21.56 69.56 1.24 0.62 1.8
FRDTX

It looks like the retirement of long-time Lead Manager Donald G. Taylor hasn’t affected FRDAX in
the slightest. The current team, led by Co-Managers Nicholas P.B. Getaz and Matthew D. Quinlan,
continues to follow Taylor’s formula of betting on stocks that have a history of raising their payouts
significantly over the last 10 years. Using the same screen of five various fundamental metrics for
quality as well as a few valuation metrics, FRDAX’s total returns have been stellar at 30.19% over
the last year. With a great 1.24% yield and low expenses of 0.62%, FRDAX makes an ideal core
equity income choice.

8. Vanguard Growth & Income Admiral (VGIAX)

Managers: Hal W. Reynolds, Thomas D. Stevens, James P. Stetler, Philip Kearns, Binbin Guo

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

29.77 11.77 84.83 1.63 0.23 VQNPX 6.8

Run by a trio of subadvisors, VGIAX’s mission is to provide a total return greater than the return of
the Standard & Poor’s 500 Index. To accomplish this, subadvisors employ a variety of quantitative
models that look to capture “bottom up” stock-specific return opportunities. Risk controls are also
employed. The idea is to create a portfolio that uses appreciation as well as dividends to drive
investor returns. The hope is that those returns best the broader S&P 500. So far, VGIAX has had
a good run with 12-month total returns clocking in at 29.77%. As we said, income is a good part
of that return with the fund having a yield of 1.63%. And as a Vanguard fund, expenses are low at
0.23%.

page 11
9. Principal Equity Income Inst (PEIIX)
Manager: David W. Simpson, Daniel R. Coleman, Nedret Vidinli

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

PQIAX
28.95 8.48 34.07 1.48 0.52 8.1
PEUCX

The return to value stocks has been wonderful news for PEIIX. Portfolio Manager David W.
Simpson continues his mission of buying large- and mid-cap U.S. stocks that trade at discounts
or are undervalued to their potential. Dividends have long been a driver for this fund, but with
investors looking towards value stocks over the last few months, total returns for PEIIX have been
great. The fund managed to generate a total return 28.95% over the last year. The fund yields
1.48% and charges 0.52% in expenses.

10. Columbia Dividend Income Inst3 (CDDYX)

Managers: Scott L. Davis, Michael S. Barclay, Peter C. Santoro

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

GSFTX
CVIRX

Best Dividend Fund Managers — Best Dividend Fund Managers & Their Top Holdings
CDDRX
28.31 19.28 24.88 1.78 0.58 10.8
LBSCX
LBSAX
GEQAX

As they say, “cash is king.” And that’s what Lead Manager Scott L. Davis has been focusing on for
the last two decades at CDDYX. The fund seeks out firms that have strong free cash flows and,
more importantly, are willing to share those cash flows with investors. Buybacks and dividends
rule CDDYX’s portfolio. As a result, the underlying fund’s portfolio tends to skew towards value
stocks with plenty of growth potential under their belts. This strategy has continued to pay
dividends for investors with a 12-month total return of 28.31%. Aside from its decent yield of 1.78%,
CDDYX offers plenty of low volatility to balance out a portfolio. Expenses run at 0.58%.

page 12
 Honorable Mentions*

11. Hartford Dividend and Growth Y (HDGYX)

Managers: Edward P. Bousa, Matthew G. Baker, Mark E. Vincent, Nataliya Kofman

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

IHGIX
HDGIX
28.18 9.52 26.53 1.40 0.69 7.9
HDGCX
HDGFX

Businesses rise and fall based on the strength of their moats and brands. Focusing on the strong
players in various industries can lead to real returns for investors over the long term. And that’s
just what Manager Edward P. Bousa does. Bousa looks towards these “franchises.” It turns out,
those great brands and wide moats tend to be wonderful dividend payers as well. There’s plenty
of cash flow support and these firms aren’t scared to share that cash with investors. This produces
some pretty decent total returns, with HDGYX gaining 28.18 over the last year. Expenses for the
fund are 0.69%, while it yields 1.40%.

12. Fidelity Equity Income (FEQIX)

Honorable Mentions — Best Dividend Fund Managers & Their Top Holdings
Managers: Ramona Persaud

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

27.90 6.35 60.59 1.72 0.60 None 8.2

Sometimes you just need income today. Luckily, that’s what FEQIX’s Lead Manager Ramona
Persaud is after. Persaud seeks to provide investors with a reasonable income and a yield that
is greater than that of the S&P 500. Capital appreciation is sort of an afterthought. But Persaud
and her team don’t just look for any high yield. She screens the index for stocks with strong
fundamentals, cash flows and growth behind them. This provides a healthy 1.72% current yield.
With a 12-month total return of 27.90%, FEQIX has done a great job of giving investors a great total
return as well.

*All data presented in this section is as of December 31, 2019.

**Each share class available for a fund has different fees and expense structures, but all of the share
classes for a particular fund invest in the same securities and have the same fund managers. page 13
13. BlackRock Equity Dividend Instl (MADVX)
Manager: Tony DeSpirito, Franco Tapia, David Zhao

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

MDDVX
MCDVX
27.52 20.00 20.81 1.55 0.71 3.4
MSDVX
BEDCX

Growing dividends, low volatility and a value tilt are the highlights at MADVX. Led by Lead
Portfolio Manager and CEO Tony DeSpirito, the team at the fund simply focuses their attention
on U.S. large- and mid-cap stocks that pay and grow their dividends. The team runs screens for
current yields and a future ability to keep the payouts coming. This produces a portfolio of quality
stocks. It also produces some great long-term returns. Despite being a $20 billion fund, MADVX
has managed to generate a total return of 27.52% over the last year. With expenses of 0.71% and a
1.55% yield, the fund makes a great core choice for dividend seekers.

14. Fidelity Equity Dividend Income (FEQTX)

Manager: John Sheehy

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

27.32 5.36 25.72 2.44 0.60 None 2.7

Honorable Mentions — Best Dividend Fund Managers & Their Top Holdings
Like fellow Fidelity Fund Manager Ramona Persaud, FEQTX Lead Portfolio Manager John Sheehy
looks for high income today by seeking to provide investors a yield that exceeds the yield on the
securities comprising the S&P 500 index. However, Sheehy doesn’t just look for high-yield stocks;
he hones in on payout ratios. Stocks with lower ratios provide some safety to a portfolio’s holdings
while offering the opportunity to see rising payouts in the future. The strategy has worked well.
FEQTX has been a great low-volatility choice with a strong one-year total return of 27.32%. The
fund yields a market-beating yield of 2.44%. Expenses run at 0.6%.

15. J.P.Morgan Equity Income A (HLIEX)

Managers: Clare Hart, Andrew Brandon, David Silberman

1 Year Net Assets NAV Yield Expense Other Share Avg. Manager
Return (%) ($ Bn) ($) (%) Ratio (%) Classes** Tenure (Years)

OIEIX
26.29 31.52 19.10 1.56 0.99 5.3
OINCX
For conservative investors, HLIEX could be a top choice for their portfolios. The proof is in
Portfolio Manager Clare Hart’s strategy. Hart and her team hunt for large-cap U.S. stocks with high
revenues, cash flows and low debt. Generally speaking, these sorts of firms are often the kind that
pay high dividends. And thanks to Hart’s tough standards, the portfolio is relatively concentrated
in terms of holdings. This has helped on the return and yield front. Over the last year, HLIEX has
managed to produce 26.29% in total return and currently yields 1.56%. Expenses for the fund run
at 0.74%.

page 14
 Top Dividend Stocks*

1. Microsoft Corporation (MSFT)

Sector: Information Technology

Price Dividend Market Cap 1Y Return Number of

($) Yield (%) ($ Bn) (%) Instances

157.70 1.20% 1,203 55% 9

With CEO Satya Nadella’s continued move towards the high-margined cloud, Microsoft has
become a cash flow and dividend machine. So, it’s no wonder why nine of the top dividend mutual
funds count Mr. Softy among their top holdings. And with MSFT continuing to offer new products
for both enterprise and consumers that result in recurring subscriptions, those cash flows should
continue to grow. Add in its huge cash hoard and low payout ratio and you have a recipe for
dividend success. Today, Microsoft yields 1.25% and produces a solid trailing one-year price return
of 55%.

2. Apple (AAPL)
Sector: Information Technology

Price Dividend Market Cap 1Y Return Number of

($) Yield (%) ($ Bn) (%) Instances

Top Dividend Stocks — Best Dividend Fund Managers & Their Top Holdings
293.65 1.04% 1,305 86% 7

There’s a big reason why seven of the top dividend fund managers love Apple. The technology
giant’s cash hoard remains one of the largest in the history of the corporate world. The best part
is that it continues to raise that hoard. With a focus on services over devices, Apple’s margins
continue to rise. And the firm continues to hand out more of that cash to investors via upsized
dividends and buybacks. In the end, Apple could be one of the best dividend stocks around and
top managers recognize this. AAPL yields 1% and generated an astounding trailing one-year price
return of 86%.

3. J.P.Morgan Chase & Co. (JPM)

Sector: Financials

Price Dividend Market Cap 1Y Return Number of

($) Yield (%) ($ Bn) (%) Instances

139.40 2.37% 437 43% 6

“Shine on, you crazy Dimon.” We’re talking about the CEO of JPM, Jamie Dimon, who has made
the bank a powerhouse across all manners of its business lines. Deposits remain robust, while
loan and credit remain brisk. And while the Fed has cut rates, JPM’s net interest margins have
stayed robust. All of which has led to a strong dividend-growth profile. Six of the top dividend
funds have capitalized on this fact – holding nearly $2.3 billion worth of JPM stock. With the
bank’s fundamentals remaining some of the best among its peers, the stock is poised to keep
growing. The money-centered bank currently yields 2.37% and generated a trailing one-year price
return of 43%.

*All data presented in this section is as of December 31, 2019. page 15

4. Bank of America Corp. (BAC)
Sector: Financials

Price Dividend Market Cap 1Y Return Number of

($) Yield (%) ($ Bn) (%) Instances

35.22 1.87% 317 43% 3

Three of the top dividend managers are following Warren Buffett’s lead into Bank America. Similar
to the previously mentioned JPM, BAC continues to execute in the current market environment
with gusto. This includes its asset and brokerage operations. Simplification and cost-cutting have
made the “Thundering Herd” lean and mean, which has continued to help the bank provide a total
money picture for consumers. And those consumers are sticking with BAC. As a result, cash flows
continue to grow. BAC currently yields 1.87% and produced a trailing one-year price return of 43%.

5. Walt Disney Co. (DIS)

Sector: Communication Services

Price Dividend Market Cap 1Y Return Number of

($) Yield (%) ($ Bn) (%) Instances

144.63 1.22% 261 32% 3

Last year was a banner one for the House of Mouse. The firm ruled at the box office with several
$1 billion+ grossing films, while theme park attendance is also up and the firm’s streaming service
(Disney+) surpassed full-year subscription estimates in its first month of operation. All of this has
made Disney a cash flow and dividend powerhouse. The best part is that the firm has an equally
impressive slate of box office opportunities this year as well as plenty of new shows to stream.

Top Dividend Stocks — Best Dividend Fund Managers & Their Top Holdings
Additionally, the firm seems to have overcome its ESPN/cord-cutting problems. No wonder its
three top managers own more than $1.2 billion worth of DIS, which produced a solid trailing one-
year price return of 32%. There’s also plenty of opportunity for more dividends down the road.
Shares of Walt Disney yield 1.22%.

page 16
Contact SEPTEMBER 2019

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