From Nuveen Investments

Chart Talk

The What, Why and How of Dividend Growth Investing

A Unique Market Environment of Higher Returns Coupled With Low Volatility

The most recent 5-year time period experienced a 3.7% higher annualized return with 11.8% lower risk than the long-term historical average.

The Benefit of Dividend Growers in Volatile Markets

With the likelihood of rising market volatility growing, investors could benefit with dividend growers.

Will the Next 3 Years Look the Same

History shows since 1926 that 90% of the time there are more than just 1 negative quarter over a 3-year time frame. Therefore, a focus on the downside may help preserve capital when the markets do turn negative

Frequency of Negative Market Quarters by Decade

Since 1930 no other decade has experienced as few negative quarters as the 2010s.

Don’t be Afraid of Down Months - Invest for the Long Term

Why you shouldn’t fear negative months – a long-term approach yields a 7.4% annualized return.

How Different Dividend Payers React to Rising Rates

Regardless of the market’s reaction to rising rates, dividend growers have provided better upside and downside capture than dividend yielders.

Rising Rates: Their Effect on the Market and Dividend Payers

Dividend growth (rather than focusing on yield) might be the better option when rates rise.

What an Inverted Yield Curve Has Meant to Equity Investors

Historically, dividend growers have outperformed when the yield curve has inverted, as well as during subsequent recessions.

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Not All Stocks are Being Valued the Same

Relative to the S&P 500, dividend paying companies are trading near their largest discount over the past 5 years. On the contrary, non-dividend payers are trading near their largest premium relative to the index.

Focusing Only on Companies with Long Dividend Growth Histories Has Limitations

Only 25% of the dividend paying companies in the S&P 500 have increased their dividend for at least 10 years.

Past History of Dividend Payment Doesn’t Always Tell the Whole Story

Focusing on company fundamentals may help identify dividend cutters, as well as opportunities for dividend growth.

The Case for Diversification Across the Dividend Yield Spectrum

No single dividend yield category leads in all markets, and the top performers change over time. Investing broadly across a wide range of yields may help reduce risk in an overall portfolio.

A Sole Focus on Higher Yielders Reduces Sector Diversification Opportunities

42% of the dividend paying companies in the S&P 500 currently yield below the Index.

Dividend Growers Outperform 100% of the 10-Year Rolling Time Periods

In both up and down markets, dividend growers have outperformed 100% of the 10-year rolling time periods.

High-Quality Companies Withstood Market Drawdowns

During drawdowns of 7% or greater, high-quality companies have typically outperformed the S&P 500 Index over the last 10 years.

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