The Archer Dividend Growth portfolio holds inexpensive, high-quality US Large Cap stocks with high dividend growth rates. By focusing on dividend growth rather than just yield or consistency, we are able to construct a portfolio with better fundamental characteristics than the available dividend-oriented ETFs and mutual funds. A turnover rate lower than other stock strategies also helps make this a strong candidate for investing with a taxable account.
At Alhambra, we think that’s a smarter way to construct a dividend portfolio. Yes, you can improve on the traditional approaches to dividend investing. Yes, fundamental analysis beyond just dividends can add substantial value. No, you don’t have to sacrifice growth for income. We know because we’ve done it for you.
Quantitative Modeling
The portfolio construction process starts with a universe of 1000 large cap US stocks. This universe of stocks is then ranked using our dividend growth ranking system:
- Dividend Yield
- Dividend Growth
- 3-Year Compounded Growth Rate
- 5-Year Compounded Growth Rate
The remaining stocks are ranked using our proprietary Cash Cows ranking system:
- 5-Year Average Free Cash Flow Margin
- 5-Year Average Return On Invested Capital
To be included in the portfolio the stock must have:
- A Payout Ratio Less Than 60%
- 5 Consecutive Years Of Rising Dividends
- Reasonable Yield Between1% and 7%
Portfolio Construction & Characteristics
The portfolio currently holds 51 stocks, out of a maximum of 100, with the following fundamental profile (as of 10/15/25):
Portfolio turnover has historically been less than 35% and the methodology produces a high percentage of successful trades (72%).
Sell Discipline
Stocks are sold from the portfolio if:
- Dividend Growth Ranking Falls Out of the Top 40%
- Cash Cow Ranking Falls Out of the Top 40%
- Annual Change in the Dividend Turns Negative
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