Invesco Diversified Dividend SMA

Invesco Diversified Dividend SMA

Equity - US Equity

At a glance

Objective

Long-term growth of capital and, secondarily, current income


Universe

US dividend-paying stocks with sound balance sheets, strong cash flows and profit sustainability.


Team
  • Lead portfolio manager in place since the team's inception in 2002
  • 19 years of average industry experience
  • Each analyst has cyclical & non-cyclical industry coverage to broaden expertise

Philosophy

We believe attractively valued companies that pay dividends sustained by strong capital structures may outperform over the long term.

We focus on dividend-paying stocks using our total return strategy, emphasizing:

  • Appreciation
  • Income
  • Preservation

We emphasize the sustainability and growth of a company's dividend in our fundamental research. Here we differentiate between strong, undervalued companies returning capital to shareholders and ailing companies offering higher, yet more volatile, yields. Our goal is to add value with less risk over a full market cycle.

Process

Our disciplined investment process focuses on identifying potential candidates, company analysis, valuation and portfolio construction.

Step 1:
Candidates
  • Extensive in-house research by sector specialists
  • Proprietary multifactor screens as secondary tool
Step 2:
Analysis
  • Balance sheet analysis
  • Earnings power over two to three years
  • Free cash flow stability and growth
  • Capital allocation decisions and management
  • Competitive landscape

Step 3:
Valuation

Triangulate fair valuation:

  • Discounted cash flow and dividend discount models
  • Comparison to historical and peer valuations
  • Sensitivity analysis of financial models
Step 4:
Construction

Balance total return with risk:

  • Diversify across all broad market sectors
  • Monitor macroeconomic forces
  • Focus on the long term to minimize turnover
  • Rigorous sell discipline