Q2 2022 Dividend Growth Update

August 10, 2022

At Reaves, we believe one signal of a company’s strength and the durability of future earnings is the pace of dividend growth. Each quarter, we post the annual rate of change in the quarterly dividend payment for each stock held in the portfolios managed with our Long Term Value Strategy1.

Despite a backdrop of rising inflation and a slowing U.S. economy, we were pleased to see that the majority of companies owned as of 6/30/22 increased their dividends over the past 12 months. The weighted average dividend increase was 9.9%.

2022.08 Blog Q2 Dividend Growth Update Table

Our view is that the recent dividend growth exhibited by these companies is an indicator of their potential to compound earnings and dividends in the future and aligns with the long-term objectives of this investment strategy — to generate both income growth and capital appreciation. Please don’t hesitate to contact us with any questions about this data or our Long Term Value investment strategy.

 

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Reaves Asset Management is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration does not imply any skill or training. Reaves is a privately held, independently owned “S” corporation organized under the laws of the State of Delaware.

The information provided in this blog does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed. Investors should consider the investment objective, risks, charges and expenses of all investments carefully before investing. Any projections, outlooks or estimates contained herein are forward looking statements based upon specific assumptions and should not be construed as indicative of any actual events that have occurred or may occur.

1Beginning December 2019, Reaves LTV Strategy is represented by the LTV SMA Wrap Composite. This composite contains those LTV discretionary portfolios with wrap (bundled) fees. Wrap accounts are charged a bundled fee which includes the wrap sponsor fee, as well as, Reaves’ investment advisory fee. Due to compliance requirements, the net-of-fees calculation is computed based on the highest annual fee assigned by any wrap sponsor who utilizes this portfolio in an investment wrap program (300 basis points from 1/1/03 through 12/31/16 and, effective 1/1/2017, 250 basis points). The LTV SMA Wrap Composite performance consists of money-weighted, time-weighted returns and it includes the reinvestment of all dividends and other earnings. The inception date of the composite is December 2002; however, the composite was created in January 2013. This composite has been managed in a similar manner to the LTV ERISA Composite which ended in December of 2019. The LTV SMA Wrap Composite does not represent all of Reaves’ assets under management.

2During Q1 2022, Exelon Corp spun off Constellation Energy to its shareholders. Exelon shareholders received 1 share of Constellation for each 3 shares of Exelon held. Exelon reduced its quarterly dividend from $0.3825 to $0.3375 and Constellation initiated a quarterly dividend of $0.141. The Q2 2022 combined dividends totaled $0.3845, a slight increase from the Q2 2021 quarterly dividend from Exelon of $0.3825.

3The MSCI USA Infrastructure Index captures the opportunity set of U.S. companies that are owners or operators of infrastructure assets. Constituents are selected from the equity universe of the MSCI USA Index, the parent index, which covers large and mid-cap securities in the U.S. All index constituents are categorized in one of thirteen sub-industries, which MSCI aggregates and groups into five infrastructure sectors: Telecommunications, Utilities, Energy, Transportation and Social. Reaves’ portfolios may at times be more diversified by including companies classified as operating in the Real Estate and industrials sectors.

The MSCI USA Infrastructure Index was launched on Jan 22, 2008. Data prior to the launch date is back-tested data (i.e., calculations of how the index might have performed over that time period had the index existed). There are frequently material differences between back-tested performance and actual results. Past performance -- whether actual or back-tested -- is no indication or guarantee of future performance.

Weighted average is a calculation that takes into account the varying degrees of importance of the numbers in a data set. In calculating a weighted average, each number in the data set is multiplied by a predetermined weight before the final calculation is made.

Past results do not guarantee future performance. Further, the investment return and principal value of an investment will fluctuate; thus, investor’s equity, when liquidated, may be worth more or less than the original cost. This document provides only impersonal advice and/or statistical data and is not intended to meet objectives or suitability requirements of any specific individual or account.

All investments involve risk, including loss of principal. All data is presented in U.S. dollars.
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