Dividend Value strategies focus on dividend yield or continuity of dividend payments. Dividend growth strategies focus on dividend growth. zCapital uses a combination of these two strategies. In our view, this offers the best chances of success. This approach provides on the one hand a stabilising element in the portfolio and at the same time the opportunity for better performance.
Steadily rising dividends are a sign of a strong business model and good business performance. Swiss dividend-payers with rising dividends show above-average performance.
Dividend Traffic Light System
Our Dividend Traffic Light System examines risks of dividend stocks and identifies investment opportunities. The model analyses balance sheet risks and past dividend payments. It also looks at dividend sustainability and growth, and corporate governance.
Balance sheet risk is a hard exclusion criterion in the model. We do not invest in companies with too much debt. The other factors may influence our investment decision.
The corporate governance criterion relates to management remuneration. Remuneration is set by the board of directors. It can lead to conflicts of interest between shareholders and management or the board.
Fundamental research focuses on qualitative analysis of the business model, management, market and competitive position. The quality of the balance sheet and the shareholder structure are also analysed. zCapital favours companies with market, technology or cost leadership.
The dividend potential of the companies is also assessed. Dividends are based on sustainable free cash flow. It represents the dividend potential of a company. In particular, we identify the factors that could negatively affect this potential.
Valuation analysis is very important and is a key factor in portfolio construction. Various valuation metrics are used. The analysis reveals discrepancies between market price and fair value. This can lead to investment opportunities or portfolio adjustments.
We aim to invest responsibly. We are committed to improve environmental, social and governance issues. We carry out our own sustainability analysis.
We conduct ESG analysis for each individual company. The aim is to identify risks and opportunities for stock selection at an early stage. We have developed our own ESG monitor for this purpose. The analysis provides an additional investment perspective.