Our smig strategy focuses on owning small and medium-size companies with market capitalizations at purchase of between $200 million and $15.0 billion. Protection of capital in falling markets, providing an above-average and growing income stream, and strong performance relative to small to medium-size company managers constitute the strategy’s goals.
Bahl & Gaynor’s equity selection process yields an investable universe of companies that are managed conservatively and for long-term growth, have stable and sustainable business models, and reward shareholders of the company with a growing dividend. From this investable universe, the smig strategy seeks small to medium-size companies with the ability to grow their dividend payments at a high rate in the future. The minimum dividend yield at purchase is 2.0%.
Over a full market cycle of five to seven years, Bahl & Gaynor’s smig strategy seeks to outperform its benchmark and small/mid capitalization growth peers all in the context of a lower-than-average portfolio risk profile.
Client portfolios will generally be diversified among a selection of 40 to 55 common stock issues with each security typically held for three to five years. Low portfolio turnover combined with the favorable tax treatment of dividend income results in a cost and tax-efficient portfolio.