The Miller/Howard Strategic Dividend Index seeks to capture and distill all we have learned over nearly a quarter century of active management of dividend companies. Our strategic, rules-based index is created to enhance current passive approaches to asset allocation, going beyond market exposure by applying persistent, strategic factors we have observed and confirmed through our active management. We seek to find and retain the "good," as opposed to cap-weighted indexes, which in our view hold the good, the bad, and the ugly—by their very nature and definition.
The Miller/Howard Strategic Dividend Index is a composite of 30 publicly traded equities that provide above-average dividend yields and dividend growth, and are equal weighted based on certain quantitative fundamental factors.
Estimated Growth of Yield
Key Ranking Factors
The index is premised on the assumption that certain observable fundamental factors influence
the overall performance and growth of stocks with above-average dividend yields.
Dividend Yield must fall within deciles 7-10 of the investable universe. The 350 lowest yielding stocks from this universe are selected, reducing the impact of the highest yielding stocks on the portfolio.
Asset Valuation. From the resultant 350 stocks, the 300 stocks with the lowest market valuation
are selected using the company's stated book value.
Profitability. From the resultant 300 stocks, the 150 most profitable companies are selected
based on estimated Return on Invested Capital, adjusted by valuation.
Continued... Estimated Growth of Yield. The estimated 3-year dividend growth rate is added to the
current indicated yield and the top 50 companies with the highest combined number is
selected. The bottom 45 stocks in the ranking for yield plus growth of yield are selected to
reduce anomalies and database errors.
Momentum. The final rank seeks to capture the "momentum effect" by selecting the 35
stocks with the highest 26-week total return. Here again, outliers are reduced by selecting
the 30 stocks with the lowest 26-week total return.
As of selection date 12/30/2016
July 2, 2014
Chicago Board Options Exchange
Must be listed on the New York Stock Exchange or NASDAQ.
It must have paid quarterly dividends in two previous quarters.
No dividend decrease in the past twelve months.
It must be a corporation or ADR.
MLPs and REITs are excluded.
Market capitalization of over $1 billion.
Above certain three-month average daily trading volume thresholds.
Annualized Performance vs. S&P 500 Index (Total Return as of 12/31/2016) Source: Bloomberg.
It is not possible to invest directly in an index. Index performance does not reflect the deduction of any fees and expenses.
Past performance is not a guarantee of future returns. Note: Not annualized if less than one year.
Miller/Howard Strategic Dividend Index Holdings as of Selection Date 12/30/2016
The securities identified and described above do not represent all of the securities purchased, sold or recommended for client accounts, or all securities considered as a candidate for inclusion in the Index. The reader should not assume that an investment in the securities identified was or will be profitable.
Past performance does not guarantee future results.
This data is provided for informational purposes only and is not intended for trading purposes. Information shown shall not constitute an offering of any security, product, or service. In addition, removal or inclusion of a security in the index is not a recommendation to buy, sell, or hold that security, nor is it investment advice. It is not possible to invest directly in an index. Index performance does not reflect the deduction of any fees and expenses. Past performance is not a guarantee of future returns.
The information contained on this site is current as of the publication date. Miller/Howard Strategic Indexes, LLC ("MHSI") makes no representations with respect to the accuracy or completeness of these materials and will not accept responsibility for damages, direct or indirect, resulting from an error or omission in this document.
This communication is for informational purposes only, and does not constitute an offering of any security, product, or service.
MHSI receives compensation in connection with licensing its Indexes to third parties. In addition, Miller/Howard Investments, an affiliate of MHSI, provides investment advice to clients and receives fees from those clients accordingly. Miller/Howard Investments, as part of providing investment advice may recommend to its clients to buy or sell securities included in an Index. Such recommendations are made independent of any changes made to an Index or any changes that may be under consideration. MHSI has established policies and procedures to ensure its activities as Index Sponsor are separate from and independent of Miller/Howard Investments’ activities as an investment advisor. The Indexes are the exclusive property of Miller/Howard Strategic Indexes, LLC which has contracted with Chicago Board Options Exchange ("CBOE") to maintain and calculate the Indexes.
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