Dividend Growth Split Corp. Renews Its At-The-Market Equity Program
Dividend Growth Split Corp. (the “Fund”) is excited to share that it has renewed its at-the-market equity program (“ATM Program”). This initiative allows the Fund to issue class A and preferred shares (referred to as “Class A Shares” and “Preferred Shares,” respectively) to the public as needed, based on the Fund’s discretion. The newly renewed ATM Program replaces the previous one that was established in April 2023 and has now concluded.
ATM Program Details
Class A Shares and Preferred Shares sold under the ATM Program will be available through the Toronto Stock Exchange (the “TSX”) or other Canadian marketplaces. These sales will occur at the current market price at the time of sale, ensuring that the pricing aligns with prevailing market conditions. The sales are governed by an equity distribution agreement recently established with RBC Capital Markets serving as the Agent.
Sales Structure
The sales will be categorized as “at-the-market distributions” in accordance with National Instrument 44-102 Shelf Distributions. Since shares will be sold at market prices, buyers may experience different prices throughout the distribution period.
Financial Goals
The ATM Program aims to raise a maximum of $75 million in gross proceeds for both Class A Shares and Preferred Shares. This program is outlined in a prospectus supplement that complements the Fund’s short form base shelf prospectus.
Management and Investment Strategy
The Fund invests in a portfolio (the “Portfolio”) primarily made up of equity securities from Canadian dividend growth companies, maintaining an approximately equal weighting. The Manager, Brompton Funds Limited, also has the discretion to invest up to 20% of the Portfolio’s total assets in global dividend growth companies, which helps enhance diversification and potential returns.
Investment Criteria
For a dividend growth company to be included in the Portfolio, it must meet specific criteria related to market capitalization and demonstrated dividend growth. In particular, the company should have a market capitalization of at least $2.0 billion and either a history of dividend growth or significant potential for future growth, as evaluated by the Manager.
Investment Objectives
The investment objective for Class A Shares is to provide holders with regular monthly cash distributions, targeted at a minimum of $0.10 per Class A Share, along with opportunities for growth in the net asset value per Class A Share. For the Preferred Shares, the goal is to offer fixed cumulative preferential quarterly distributions, initially set at $0.1375 per Preferred Share, which will increase to $0.16875 per Preferred Share from the end of September 2024 until the end of August 2029. Additionally, the original issue price will be returned to Preferred Shareholders by the end of August 2029.
Performance Overview
In the past decade, Class A Shares have achieved an impressive annual total return of 11.4% based on NAV, outperforming the S&P/TSX Composite Index by 4.0% per year. Similarly, the Preferred Shares have recorded a return of 5.5% per year over the same period, exceeding the S&P/TSX Preferred Share Index by 3.0% per year.
About Brompton Funds
Founded in 2000, Brompton Funds is a seasoned investment fund manager that specializes in income-generating investment solutions, including exchange-traded funds (ETFs) and other investment funds traded on the TSX. Investors seeking more information are encouraged to consult their investment advisor, contact Brompton’s investor relations team at 416-642-6000 (or toll-free at 1-866-642-6001), or email at info@bromptongroup.com.
Frequently Asked Questions
1. What is the purpose of the ATM Program?
The ATM Program allows Dividend Growth Split Corp. to issue class A and preferred shares to the public, helping to raise capital for investment purposes.
2. Who is responsible for managing the Fund's investment strategy?
The investment strategy is managed by Brompton Funds Limited, which determines the allocation and investment practices.
3. What are the expected returns for Class A Shares?
Class A Shares aim to provide monthly distributions of at least $0.10 per share, along with opportunities for value growth over time.
4. How does the Fund's performance compare to market indices?
Over the last decade, Class A Shares have outperformed the S&P/TSX Composite Index, reflecting effective management and sound investment decisions.
5. How can investors find information about the Fund?
Investors can obtain information through their financial advisors or directly from Brompton, including public filings available on SEDAR+.
