Madison’s dividend income strategy is comprised of approximately 35-55 holdings that have dividend yields above the S&P 500 Index yield. The strategy has a goal of achieving long-term outperformance over a complete market cycle on a risk-adjusted basis. To accomplish this objective the team employs a relative yield strategy.
Relative yield is defined as a stock’s dividend yield divided by the market dividend yield. An attractive relative yield candidate is a stock with a relative yield near the high-end of its historical range and a long dividend paying history with a record of dividend increases.
Once the team identifies high relative yield stocks, the team analyzes business models, balance sheets and cash flow profiles to make sure the businesses will be able to continue paying dividends.
The team strives to invest in stocks that have sustainable competitive advantages and low valuations with potential for the stock's valuation to expand. They also seek to avoid stocks that may have high dividend yields but face secular challenges.
The strategy has a goal of producing current income while providing an opportunity for capital appreciation. Additionally, the strategy has a high-quality focus that may provide downside protection in difficult market environments.
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“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC, and Madison Investment Advisors, LLC, which also includes the Madison Scottsdale office. Madison Funds are distributed by MFD Distributor, LLC. Madison is registered as an investment adviser with the U.S. Securities and Exchange Commission. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer, and is a member firm of the Financial Industry Regulatory Authority.
Madison Investments shares all personnel and resources at their Madison, Wisconsin location. Statistical data is for the consolidated Madison organization. The Madison organization consists of its holding company, Madison Investment Holdings, Inc. and its affiliates: Madison Asset Management, LLC; Madison Investment Advisors, LLC; and Hansberger Growth Investors, LP. Asset information presented includes non-discretionary assets. Refer to each entity’s Disclosure Brochure for more information.