article 08-24-2015

Jay Kaplan in Kiplinger: Dividends Can Be a Sign of Quality

What characteristics does Portfolio Manager Jay Kaplan like to see from dividend-paying small-cap companies?

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"Dividend-paying companies have staying power," said Portfolio Manager Jay Kaplan in Kiplinger's "4 Small-Cap Dividend Stocks With Big Appeal," written by Miriam Cross and published on August 16, 2015. "They tend to be better-quality businesses," he added.

According to the article, the most attractive dividend-paying companies are those with strong financial stability characterized by profitability and little to no debt. Additionally, companies with the ability to consistently raise dividends can also "offer the most upside."

Jay owns three of the companies mentioned in the article—ABM Industries, The Buckle, and City Holding, the last of which Jay calls "a big player in a small market."

Jay Kaplan has 27 years of investment industry experience, 14 of which at Royce. He is co-portfolio manager of Royce Total Return Fund and Royce Dividend Value Fund—with Chuck Royce—and the portfolio manager of Royce Small-Cap Value Fund and Royce Capital Fund—Small-Cap Portfolio. In addition, he is an assistant manager of Royce Pennsylvania Mutual Fund.

Read the full article at Kiplinger.com

Important Disclosure Information

Jay Kaplan is a Portfolio Manager of Royce & Associates, LLC, investment advisor to The Royce Funds. He serves as portfolio manager for Royce Total Return Fund, Royce Dividend Value Fund, Royce Small-Cap Value Fund, and Royce Capital Fund—Micro-Cap Portfolio. He also serves as assistant portfolio manager for Royce Pennsylvania Mutual Fund. The thoughts and opinions expressed in this piece are solely those of the person speaking and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements. There can be no assurance that companies that currently pays a dividend will continue to do so in the future.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. Investments in securities of smaller-cap companies may involve considerably more risk than investments in securities of larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.)

Percentage of Fund Holdings as of 6/30/15 (%)

  ABM Industries Buckle (The) City Holding Company
Total Return 0.49 0.65 0.54
Dividend Value 0.00 1.02 0.55
Small-Cap Value 0.00 3.05 2.04
Capital Small-Cap 0.00 3.01 2.00
Pennsylvania Mutual 0.00 0.80 0.23

There can be no assurance that any of the securities mentioned in the interview will be included in these portfolios in the future. References to specific securities in this interview are not intended as recommendations and should not be relied upon as the basis for anyone to buy, sell, or hold any security.

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