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The Royce Dividend Value Fund (MUTF:RYDVX) has won many mutual fund industry awards. It earned fives (the highest score) for total return and consistent return from Lipper and five stars from Morningstar. These awards and the success of co-chief investment officer and portfolio manager Charles Royce attract investors to RYDVX.

Unfortunately, there is a catch. Owners of RYDVX pay 1.49% in fund expenses. Do dividend-focused investors need to pay such high fees for Royce's management?

Instead of outsourcing portfolio construction by purchasing shares of RYDVX, investors can boost their returns by purchasing the fund's dividend-paying stock holdings directly. Buying directly sidesteps the fund's recurring annual expenses by paying trading costs and broker fees only once. This fund replication strategy allows retail investors to benefit from portfolio manager research and stock selection at no cost.

Consider the following five holdings summarized below:

American Eagle Outfitters, Inc. (NYSE:AEO) recently traded at $14.03 per share. At this price level, the stock has a 3.1% dividend yield. For seven out of the past 10 fiscal years, a share of AEO paid a total of $2.11 in dividends. Of these dividend payments, a total of $1.89 was paid in the last five years.

AEO shareholders have endured a -8.2% change in share price over the past year. At present, shares of this mid-cap stock trade at a price-to-book ratio of 2.0, a price-to-earnings multiple of 14.8, and a price-to-sales multiple of 0.9 (trailing twelve months). Over the past decade, shareholders savored a 19.5% average annual return on equity.

Buckle Inc. (NYSE:BKE) recently traded at $44.88 per share. At this price level, the stock has a 1.8% dividend yield. For eight out of the past 10 fiscal years, one share of BKE paid a total of $3.95 in dividends. Of these dividend payments, a total of $3.39 was paid in the last five years.

BKE shareholders have enjoyed a 10.4% change in share price over the past year. At present, shares of this mid-cap stock trade at a price-to-book ratio of 6.8, a price-to-earnings multiple of 14.6, and a price-to-sales multiple of 2.1 (trailing twelve months). Over the past decade, shareholders savored a 21.6% average annual return on equity.

Quaker Chemical Corporation (NYSE:KWR) recently traded at $47.45 per share. At this price level, the stock has a 2.0% dividend yield. For 10 out of the past 10 fiscal years, a share of KWR paid a total of $8.70 in dividends. Of these dividend payments, a total of $4.48 were paid in the last five years.

KWR shareholders have savored a 22.7% change in share price over the past year. At present, shares of this small-cap stock trade at a price-to-book ratio of 2.4, a price-to-earnings multiple of 14.3, and a price-to-sales multiple of 0.9 (trailing twelve months). Over the past decade, shareholders savored a 11.2% average annual return on equity.

Nucor Corporation (NYSE:NUE) recently traded at $45.41 per share. At this price level, the stock has a 3.2% dividend yield. For 10 out of the past 10 fiscal years, a share of NUE paid a total of $7.12 in dividends. Of these dividend payments, a total of $5.89 was paid in the last five years.

NUE shareholders have enjoyed a 14.8% change in share price over the past year. At present, shares of this large-cap stock trade at a price-to-book ratio of 1.9, a price-to-earnings multiple of 18.5, and a price-to-sales multiple of 0.7 (trailing twelve months). Over the past decade, shareholders savored a 17.1% average annual return on equity.

Owens & Minor Inc. (NYSE:OMI) recently traded at $31.17 per share. At this price level, the stock has a 2.6% dividend yield. For 10 out of the past 10 fiscal years, a share of OMI paid a total of $3.96 in dividends. Of these dividend payments, a total of $2.70 was paid in the last five years.

OMI shareholders have enjoyed a 12.2% change in share price over the past year. At present, shares of this small-cap stock trade at a price-to-book ratio of 2.2, a price-to-earnings multiple of 17.5, and a price-to-sales multiple of 0.2 (trailing twelve months). Over the past decade, shareholders savored a 13.5% average annual return on equity.

Ticker

Company

RYDVX Weight

Div Yield

AEO

American Eagle Outfitters, Inc.

0.89%

3.1%

BKE

Buckle Inc.

1.05%

1.8%

KWR

Quaker Chemical Corporation

0.98%

2.0%

NUE

Nucor Corporation

1.17%

3.2%

OMI

Owens & Minor Inc.

0.99%

2.6%

All of these holdings are excellent companies based on their long histories of dividend payments and a decade of positive equity returns. These stocks are formidable picks because they have amazing track records and because they have passed the RYDVX due diligence process.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.

Source: 5 Dividend Stock Picks From The Royce Dividend Value Fund