MARRIOTT SIX-STEP FILTER PROCESS FOR DIVIDENDS
Market cap filter: South African companies need to have a market capitalisation of more than R2bn and international companies need to be listed on a major First World exchange. This excludes smaller, more speculative investments.
Dividend filter: Companies that have not paid dividends over the last three years are filtered out.
Economic screen: We exclude companies vulnerable to current economic conditions. MTN, for example, has recently been removed from our local equity portfolio due to its large exposure to the volatile Nigerian economy.
Industry screen: Companies operating in unpredictable industries are filtered out, such as commodity producers. Thus, despite being the most widely held share in SA, Sasol has never been included in a Marriott portfolio as the company’s profitability is linked to the price of oil. Internationally, technology stocks such as Apple and Sony are avoided due to their reliance on innovation to grow.
Company screen: We avoid companies with specific risks to dividends, for example, companies with too much debt or risky business models. This filter ensured that our portfolios had no exposure to African Bank, a share which hurt investors in 2014.
Yield screen: Companies offering investors best value are selected from the remaining pool of securities.