| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.2% | 4.0% | 15.6% |
| 2025 |
|---|
| 15.6% |
Miller/Howard's Income-Equity strategy delivered strong 4Q 2025 performance, outperforming benchmarks while maintaining a 3.6% dividend yield approximately three times the S&P 500. The manager draws parallels between current AI investment patterns and survivorship bias, arguing that markets have crowded into visible AI winners while overlooking traditional companies that could benefit from AI as an operational input. The portfolio focuses on steady-growing businesses in labor-intensive industries trading at significant discounts to the broad market, with P/E ratios 40-42% below the S&P 500. Six companies increased dividends during the quarter, led by MPLX's 13% boost. The strategy added regional banks M&T and Regions Financial, plus retailer Gap, while exiting Jefferies due to bankruptcy exposure concerns and JPMorgan after strong price appreciation reduced its yield. Looking ahead, the manager believes AI adoption could drive step-change productivity improvements in traditional industries, potentially fueling a market rotation that began in 4Q 2025 and favoring overlooked dividend-paying companies positioned for operational leverage.
Dividend-focused companies in traditional industries represent overlooked opportunities positioned to benefit from AI adoption as an operational input, while expensive AI winners face valuation risks from historical patterns of technology diffusion and margin compression.
The manager expects AI's transformative impact to benefit traditional companies using it as an operational input, potentially driving a market rotation that began in 4Q 2025. They anticipate continued focus on collecting high and rising dividends while compounding returns through disciplined reinvestment, viewing current market dynamics as creating opportunities in overlooked dividend-paying businesses.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 24 2026 | 2025 Q4 | ABBV, C, COP, CSCO, EMN, ETR, GILD, GPS, GSK, HRB, HRL, JEF, JNJ, JPM, MPLX, MTB, PAYX, RF, STT, VICI, VZ | AI, dividends, income, productivity, value | - | AI represents a transformative technology that could drive step-change improvements in economic productivity. The manager believes AI's greatest impact will come from companies using it as an input to improve operations rather than those selling AI products. Many dividend-paying companies in labor-intensive industries could benefit significantly from AI adoption through process automation and efficiency gains. The portfolio focuses on high dividend yields approximately 3x the S&P 500, with strong dividend coverage ratios and projected dividend growth. Six companies increased dividends in the quarter, led by MPLX with a 13% increase. The strategy emphasizes collecting high and rising dividends while compounding real cash returns through disciplined reinvestment. The portfolio trades at significant discounts to the broad market, with P/E ratios 40-42% below the S&P 500. The manager believes many steady-growing companies are overlooked by markets focused on AI winners, creating opportunities in businesses with lower assumed margins and productivity that could benefit from AI adoption. |
| Oct 19 2025 | 2025 Q3 | ABBV, BK, C, CAG, CMCSA, COP, ELS, EMN, GSK, HRL, JNJ, ORI, PAYX, TTE, TXN | AI, cash flow, dividends, financials, value |
COP ELS HRL TTE |
Income-Equity portfolios outperformed on dividend strength from financials and healthcare while contrasting AI-driven spending by large-cap tech firms. The strategy emphasizes high and growing income from undervalued cash-generative companies, avoiding speculative AI capex cycles. |
| Jul 22 2025 | 2025 Q2 | ABLV, C, CAG, CSCO, EMN, EPD, GS, JNJ, JPM, MRK, PAYX, RHI, STT, TRP | cash flow, dividends, income, total returns, volatility | - | The letter emphasizes equity income as a durable return driver in an environment of elevated uncertainty, market concentration, and volatile macro signals. Management argues that dividends provide a more stable and predictable component of total returns than buybacks, particularly during downturns when capital discipline matters most. The strategy favors companies with resilient cash flows, balance sheet strength, and a demonstrated commitment to growing shareholder payouts over time. |
| Mar 31 2025 | 2025 Q1 | ABLV, GILD, HST, JNJ, MPLX, ORI, RHI | - | - | |
| Dec 31 2024 | 2024 Q4 | GSK, USB | - | - | |
| Sep 30 2024 | 2024 Q3 | CAH, ETR | - | - | |
| Jun 30 2024 | 2024 Q2 | AVGO, CAG, RHI | - | - | |
| Mar 31 2024 | 2024 Q1 | CNQ, EOG, EWBC | - | - | |
| Dec 31 2024 | 2023 Q4 | BAC, CAG, HST, MDT, OGE, POR | - | - | |
| Sep 30 2024 | 2023 Q3 | NTR, PAYX, WBA | - | - | |
| Jun 30 2024 | 2023 Q2 | CAG, EMN, EPD, EXR, KEY, MSM, PSX, RY | - | - | |
| Mar 30 2024 | 2023 Q1 | CPT, MAA, RE | - | - | |
| Feb 22 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
| 2025 Q2 |
Income |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 19, 2025 | Fund Letters | Adam Fackler | COP | ConocoPhillips | Energy | Oil & Gas Exploration & Production | Bull | NYSE | buybacks, cash flow, dividends, Gas, oil, Permian, Projects | Login |
| Oct 19, 2025 | Fund Letters | Adam Fackler | ELS | Equity Lifestyle Properties Inc. | Real Estate | Residential REITs | Bull | NYSE | affordability, cash flow, dividends, Housing, Occupancy, REIT, Rent | Login |
| Oct 19, 2025 | Fund Letters | Adam Fackler | HRL | Hormel Foods Corporation | Consumer Staples | Packaged Foods & Meats | Bull | NYSE | consumer, dividends, inflation, Margins, Protein, stability, Staples | Login |
| Oct 19, 2025 | Fund Letters | Adam Fackler | TTE | TotalEnergies SE | Energy | Integrated Oil & Gas | Bear | - | buybacks, capital discipline, Coverage, dividends, energy, oil | Login |
| TICKER | COMMENTARY |
|---|---|
| ABBV | Other increasers included AbbVie |
| C | Money center bank Citigroup rose amid strong capital markets activity and benign credit conditions. The company continued to repurchase stock and return capital to shareholders, while expenses related to its transformation are expected to decline next year. |
| COP | Other increasers included ConocoPhillips |
| CSCO | It took Cisco, the leading provider of internet equipment and briefly the world's most valuable company, a quarter of a century and another technology bubble to regain its peak. |
| EMN | Other increasers included Eastman Chemical |
| ETR | Other increasers included Entergy Corp |
| GILD | Gilead Sciences contributed with 5.78% ending weight and 0.58% contribution. |
| GPS | Our research suggests the company's transformation plan supports better sales growth, driven by improved on-trend styles at Old Navy and the namesake brand |
| GSK | Glaxo is one of the world's leading pharmaceutical companies. Its share price has been stagnant for years despite solid earnings growth, and on 10x earnings, it excites us. |
| HRB | Adjusted EPS missed expectations, but revenue beat; however, it was a seasonally-insignificant quarter, given HRB's tax preparation business. Management guided to further market share losses in 2026 |
| HRL | Other increasers included Hormel Foods |
| JEF | questions emerged around Jefferies' potential exposure to the First Brands bankruptcy, and we exited the remainder of the position that we began trimming in January |
| JNJ | During the quarter, we switched out of a long-held position in Johnson & Johnson into a new holding in Merck. |
| JPM | JPMorgan (JPM) has identified 42 AI-related stocks in the S&P 500, which today represent 45% of the index's market cap. They estimate that these stocks have accounted for 78% of S&P 500 returns, 66% of earnings growth, and 71% of capital spending growth since ChatGPT launched in November 2022. As it relates to the impact on the U.S. economy, JPM estimates tech sector capital spending contributed 40%-45% of U.S. GDP growth through the first 9 months of the year, up from less than 5% during the same period in 2023. |
| MPLX | boosted its dividend 13% year-over-year |
| MTB | M&T has a low-cost deposit base and is overcapitalized, which should support a step-change in buybacks and dividends, in our opinion |
| PAYX | Despite PAYX reporting strong earnings that exceeded expectations, the stock sold off 10% on economic concerns which mutes the near-term outlook. Employment numbers for small and midsized businesses remain weak which pressured the stock. |
| RF | Regions' southern US footprint positions it well for future economic growth, in our view |
| STT | Beat on both EPS and revenue on strong servicing and management fees income; AUC & AUM were both higher than expected, benefitting from market appreciation as well as inflows. Deposit growth was disappointing |
| VICI | Reported EPS, AFFOPS, and revenue that were in line with expectations. Management raised the bottom range of AFFOPS guidance. Shares came under pressure as a customer that was expected to do a sale-leaseback transaction withdrew its bid for new NYC casino, and as Canadian travel to Las Vegas has been down |
| VZ | In line EPS with a very slight miss on revenue. Postpaid phone losses were much less than expected. New CEO said the right things on the call, but investors are awaiting policies and results |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
