According to Standard and Poor's, dividends have been responsible for 44% of the total return in the S&P 500 index over the past 80 years. The following chart shows the increase in stock market value with dividends reinvested (orange line) versus the rise in security value without reinvesting dividends (blue line) since 1950:

Past performance is no guarantee of future performance. An investment product which attempts to mimic the performance of an index will incur expenses such as management fees and transaction costs which reduce returns.

Mtchell, Vaught and Taylor, Inc. offers a Dividend Stock account for clients looking to invest in high quality U.S. companies for long-term growth and income. We select companies headquartered in the U.S with long-term records of success. Many of these companies operate globally and derive a significant portion of their income from abroad. We look for dominant market share, strong balance sheet and dividend growth over 5 years.

Investment Objectives

The primary objective of the Dividend Stock account is long-term growth and investment income. We concentrate on large and mid-cap dividend paying U.S. companies and we seek to:

• Deliver above average returns

• Provide performance in excess of the appropriate benchmark (S&P 500 Total Return)

• Manage risk in a well researched portfolio model through our analysis and screening process and regular review by the portfolio manager and senior management.

Stock Screening Process

We select stocks for the Dividend Stock account beginning with the universe of more than 6000 domestic companies and then narrow the selection with quantitative screens:

• Large and mid-cap companies

• Positive profitability

• 5 year dividend growth rate

• Price/Earnings to Growth Ratio (PEG)

• Estimated Earning Per Share growth (EPS)

We follow these screens with qualitative measures including payout ratio, sustainability of dividends, analyst ratings, recent earning trends, earnings surprises, performance versus industry. We may select stocks outside of the screening process if they meet other subjective and technical criteria.

Portfolio Characteristics

This stock screening process is intended to create a lower risk portfolio that exceeds the S&P 500 Total Return index in yield, return on assets and projected earnings growth. The dividend stock account is typically underweight in financials and consumer cyclicals while overweight in industrials and consumer staples.

Contact Mitchell, Vaught & Taylor, Inc.

The Dividend Stock account is available to investors with $200,000 to allocate to this portfolio for growth and income. Please contact our staff for more information.