UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-21668 |
|
Cohen & Steers Dividend Value Fund, Inc. |
(Exact name of registrant as specified in charter) |
|
280 Park Avenue, New York, NY | | 10017 |
(Address of principal executive offices) | | (Zip code) |
|
Adam M. Derechin Cohen & Steers Capital Management, Inc. 280 Park Avenue New York, New York 10017 |
(Name and address of agent for service) |
|
Registrant’s telephone number, including area code: | (212) 832-3232 | |
|
Date of fiscal year end: | February 28 | |
|
Date of reporting period: | August 31, 2009 | |
| | | | | | | | |
Item 1. Reports to Stockholders.
COHEN & STEERS DIVIDEND VALUE FUND, INC.
To Our Shareholders:
We would like to share with you our report for the six months ended August 31, 2009. The net asset values per share at that date were $10.08, $10.03 and $10.09 for Class A, Class C and Class I shares, respectively.
The total returns, including income and change in net asset value, for the Fund and the comparative benchmarks were:
| | Six Months Ended August 31, 2009 | |
Cohen & Steers Dividend Value—Class A | | | 34.05 | % | |
Cohen & Steers Dividend Value—Class C | | | 33.63 | % | |
Cohen & Steers Dividend Value—Class I | | | 34.40 | % | |
Russell 1000 Value Indexa | | | 44.21 | % | |
S&P 500 Indexa | | | 40.51 | % | |
The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and the principal value of an investment will fluctuate and shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Total returns of the Fund current to the most recent month-end can be obtained by visiting our Web site at cohenandsteers.com. Performance quoted does not reflect the deduction of the maximum 4.5% initial sales charge on Class A shares or the 1% maximum contingent deferred sales charge on Class C shares. If such charges were included, returns would have been lower.
Investment Review
As the period began stock markets stood at multi-year lows, having been pressed down over the previous six months by economic and financial distress. Equities began to rally, however, initially boosted by greater clarity regarding the path the U.S. government was taking to address the financial crisis. Banks began to stabilize; Citigroup jump-started a broad market rally on March 9 when it announced that it expected to be profitable for the first two months of 2009. Equities extended their rise well into the summer as economic indicators generally exceeded expectations.
a The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The S&P 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
Within the Russell 1000 Value Index, the financial services sector was the strongest performer for the six months, with a total return of +88.7%. Leading banks and brokers reported better-than-expected first-quarter results, driven by strong mortgage originations and significant gains in fixed income trading. By mid-summer, a number of major banks were also able to repay government Troubled Asset Relief Program (TARP) loans. Second-quarter earnings for financial companies did not reveal major negative surprises, and sentiment toward the group remained largely favorable.
The materials sector (+84.9%), which tends to be an early beneficiary of economic optimism, rose sharply in the first few months of the fiscal period, only to level off as the run-up in commodity prices eased. The technology sector (+64.6%) was another standout, aided by some encouraging earnings reports and guidance from leading technology companies. Consumer discretionary stocks (+64.1%) outperformed as investors looked beyond subdued spending for non-essential goods in anticipation of a recovery.
The utilities and telecommunications sectors (which had returns of +17.8% and +13.4%, respectively) underperformed in an environment where defensive companies with more stable revenues were out of favor. Health care (+31.9%), a more defensive sector that faced some political risk (health care reform), trailed the index as well.
Fund performance
The Fund had a strong gain in absolute terms but trailed its benchmarks by a significant margin. Our quality bias in favor of large companies with a history of dividend increases was out of favor during much of the period, especially during strong upturns. Investors' preference for higher-risk and smaller-cap stocks was visible across the market; our stock selection detracted from relative performance within most sectors, led by the technology, financial services and health care sectors. Our underweights in the financial services and consumer discretionary sectors also hindered relative returns.
Factors that aided performance included our stock selection in the energy and utilities sectors, along with our underweight in utilities. We also had a beneficial underweight in telecommunications companies, which, like utilities, can offer attractive yields, yet be less compelling from a dividend-growth perspective. Our overweight in technology partly offset the stock selection effect in that sector.
Investment Outlook
Recent signs of stabilization in the economy are encouraging, although we continue to see potential trouble spots—for example, high consumer debt levels that could hold back spending and delay a sustainable recovery. While we are cautious with respect to consumer discretionary companies, we believe there are some compelling values to be found in the consumer staples sector and have positioned the portfolio accordingly.
Our meaningful allocation to the technology sector is based on dividends—and dividend growth—we find attractive, as well as these companies' potential to benefit from pent-up demand on both the consumer and enterprise levels. A lack of regulatory concerns that have hampered other sectors is also a consideration.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
We have a largely favorable view on energy companies, notwithstanding recent lackluster pricing. These companies continue to generate healthy cash flows and we believe their valuations range from reasonable to compelling, based on their longer-term prospects. Among industrials, we think there is good value in aerospace companies, which have a solid backlog of orders.
We remain generally defensive in the financial sector. Although the most recent round of earnings reports was good enough to allow for a rally in these stocks, profits could be pressured in the third and fourth quarters by factors such as high unemployment and mounting credit card losses. We likewise approach the health care sector with caution; however, some health care stocks are trading at historically low valuations and we see good opportunities in select companies.
Sincerely,
 | |  | |
|
MARTIN COHEN | | ROBERT H. STEERS | |
|
Co-chairman | | Co-chairman | |
|

RICHARD E. HELM
Portfolio Manager
The views and opinions in the preceding commentary are subject to change. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice and is not intended to predict or depict performance of any investment.
Visit Cohen & Steers online at cohenandsteers.com
For more information about any of our funds, visit cohenandsteers.com, where you will find daily net asset values, fund fact sheets and portfolio highlights. You can also access newsletters, education tools and market updates covering the global real estate, listed infrastructure, utilities, large cap value and preferred securities sectors.
In addition, our Web site contains comprehensive information about our firm, including our most recent press releases, profiles of our senior investment professionals and an overview of our investment approach.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
Performance Review (Unaudited)
Average Annual Total Returns—For the Periods Ended August 31, 2009
| | Class A Shares | | Class C Shares | | Class I Shares | |
1 Year (with sales charge) | | | –24.43 | %a | | | –22.19 | %b | | | — | | |
1 Year (without sales charge) | | | –20.87 | % | | | –21.41 | % | | | –20.58 | % | |
Since Inceptionc (with sales charge) | | | –2.13 | %a | | | –1.62 | % | | | — | | |
Since Inceptionc (without sales charge) | | | –1.00 | % | | | –1.62 | % | | | –0.64 | % | |
The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance information current to the most recent month-end can be obtained by visiting our Web site at cohenandsteers.com. The performance table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The gross and net expense ratios, respectively, for each class of shares as disclosed in the July 1, 2009 prospectuses were as follows: Class A — 1.57% and 1.15%; Class C — 2.22% and 1.80%; and Class I — 1.23% and 0.80%. Through February 28, 2010, the advisor has contractually agreed to waive its fee and/or reimburse the Fund for expenses incurred to the extent necessary to maintain the Fund's annual operating expenses at 1.15% for Class A shares, 1.80% for Class C shares and 0.80% for Class I shares.
a Reflects a 4.50% front-end sales charge.
b Reflects a contingent deferred sales charge of 1%.
c Inception date of August 31, 2005.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
Expense Example
(Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009—August 31, 2009.
Actual Expenses
The first line of the table below provides information about actual account values and expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
Expense Example (Unaudited)—(Continued)
| | Beginning Account Value March 1, 2009 | | Ending Account Value August 31, 2009 | | Expenses Paid During Period* March 1, 2009– August 31, 2009 | |
Class A | |
Actual (34.05% return) | | $ | 1,000.00 | | | $ | 1,340.50 | | | $ | 6.78 | | |
Hypothetical (5% annual return before expenses) | | $ | 1,000.00 | | | $ | 1,019.41 | | | $ | 5.85 | | |
Class C | |
Actual (33.63% return) | | $ | 1,000.00 | | | $ | 1,336.30 | | | $ | 10.60 | | |
Hypothetical (5% annual return before expenses) | | $ | 1,000.00 | | | $ | 1,016.13 | | | $ | 9.15 | | |
Class I | |
Actual (34.40% return) | | $ | 1,000.00 | | | $ | 1,344.00 | | | $ | 4.73 | | |
Hypothetical (5% annual return before expenses) | | $ | 1,000.00 | | | $ | 1,021.17 | | | $ | 4.08 | | |
* Expenses are equal to the Fund's Class A, Class C and Class I annualized expense ratio of 1.15%, 1.80% and 0.80%, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). If the Fund had borne all of its expenses that were assumed by the advisor, the annualized expense ratios would have been 1.57%, 2.21% and 1.23%, respectively.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
AUGUST 31, 2009
Top Ten Long-Term Holdings
(Unaudited)
Security | | Value | | % of Net Assets | |
Total SA (France) | | $ | 5,336,312 | | | | 2.9 | % | |
Chevron Corp. | | | 5,301,452 | | | | 2.9 | | |
JPMorgan Chase & Co. | | | 5,293,428 | | | | 2.9 | | |
Exxon Mobil Corp. | | | 5,234,655 | | | | 2.9 | | |
FPL Group | | | 4,421,366 | | | | 2.4 | | |
Devon Energy Corp. | | | 3,995,838 | | | | 2.2 | | |
McDonald's Corp. | | | 3,807,448 | | | | 2.1 | | |
AT&T | | | 3,787,670 | | | | 2.1 | | |
MetLife | | | 3,572,096 | | | | 2.0 | | |
Teva Pharmaceutical Industries Ltd. (ADR) (Israel) | | | 3,563,800 | | | | 2.0 | | |
Sector Breakdown
(Based on Net Assets)
(Unaudited)
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
COMMON STOCK | | | 96.6 | % | | | | | | | | | |
BASIC MATERIALS | | | 3.0 | % | | | | | | | | | |
Alcoa | | | | | | | 76,500 | | | $ | 921,825 | | |
Allegheny Technologies | | | | | | | 43,800 | | | | 1,330,206 | | |
Archer-Daniels-Midland Co. | | | | | | | 62,600 | | | | 1,804,758 | | |
Dow Chemical Co. | | | | | | | 21,000 | | | | 447,090 | | |
Praxair | | | | | | | 11,700 | | | | 896,454 | | |
| | | | | | | 5,400,333 | | |
CONSUMER—CYCLICAL | | | 5.9 | % | | | | | | | | | |
APPAREL | | | 1.4 | % | | | | | | | | | |
NIKE | | | | | | | 47,600 | | | | 2,636,564 | | |
MEDIA | | | 0.7 | % | | | | | | | | | |
The Walt Disney Co. | | | | | | | 45,600 | | | | 1,187,424 | | |
RETAIL | | | 3.4 | % | | | | | | | | | |
Hennes & Mauritz AB (Sweden)a | | | | | | | 17,700 | | | | 982,783 | | |
Nordstrom | | | | | | | 25,500 | | | | 715,020 | | |
Ross Stores | | | | | | | 19,200 | | | | 895,488 | | |
Wal-Mart de Mexico SA de CV (ADR) (Mexico) | | | | | | | 25,800 | | | | 909,450 | | |
Wal-Mart Stores | | | | | | | 51,900 | | | | 2,640,153 | | |
| | | | | | | 6,142,894 | | |
TOYS/GAMES/HOBBIES | | | 0.4 | % | | | | | | | | | |
Mattel | | | | | | | 43,800 | | | | 787,962 | | |
TOTAL CONSUMER—CYCLICAL | | | | | | | | | | | 10,754,844 | | |
CONSUMER—NON-CYCLICAL | | | 8.6 | % | | | | | | | | | |
AGRICULTURE | | | 2.1 | % | | | | | | | | | |
Altria Group | | | | | | | 93,300 | | | | 1,705,524 | | |
Monsanto Co. | | | | | | | 24,800 | | | | 2,080,224 | | |
| | | | | | | 3,785,748 | | |
APPAREL | | | 0.5 | % | | | | | | | | | |
VF Corp. | | | | | | | 12,300 | | | | 855,588 | | |
See accompanying notes to financial statements.
8
COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
BEVERAGE | | | 0.6 | % | | | | | | | | | |
Diageo PLC (ADR) (United Kingdom) | | | | | | | 12,300 | | | $ | 763,092 | | |
PepsiCo | | | | | | | 5,800 | | | | 328,686 | | |
| | | | | | | 1,091,778 | | |
COSMETICS/PERSONAL CARE | | | 2.2 | % | | | | | | | | | |
Colgate-Palmolive Co. | | | | | | | 11,400 | | | | 828,780 | | |
Procter & Gamble Co. | | | | | | | 59,500 | | | | 3,219,545 | | |
| | | | | | | 4,048,325 | | |
FOOD | | | 0.2 | % | | | | | | | | | |
Nestle SAa | | | | | | | 9,100 | | | | 378,861 | | |
RESTAURANT | | | 2.1 | % | | | | | | | | | |
McDonald's Corp. | | | | | | | 67,700 | | | | 3,807,448 | | |
RETAIL | | | 0.9 | % | | | | | | | | | |
Costco Wholesale Corp. | | | | | | | 17,600 | | | | 897,248 | | |
Shoppers Drug Mart Corp. (Canada) | | | | | | | 19,300 | | | | 758,072 | | |
| | | | | | | 1,655,320 | | |
TOTAL CONSUMER—NON-CYCLICAL | | | | | | | | | | | 15,623,068 | | |
ENERGY | | | 17.9 | % | | | | | | | | | |
OIL & GAS | | | 15.0 | % | | | | | | | | | |
Apache Corp. | | | | | | | 20,800 | | | | 1,766,960 | | |
Chevron Corp. | | | | | | | 75,800 | | | | 5,301,452 | | |
CNOOC Ltd. (Hong Kong)a | | | | | | | 930,000 | | | | 1,210,328 | | |
Devon Energy Corp. | | | | | | | 65,100 | | | | 3,995,838 | | |
Exxon Mobil Corp. | | | | | | | 75,700 | | | | 5,234,655 | | |
Marathon Oil Corp. | | | | | | | 105,300 | | | | 3,250,611 | | |
Occidental Petroleum Corp. | | | | | | | 17,400 | | | | 1,271,940 | | |
Total SA (France)a | | | | | | | 93,000 | | | | 5,336,312 | | |
| | | | | | | 27,368,096 | | |
See accompanying notes to financial statements.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
OIL & GAS SERVICES | | | 2.9 | % | | | | | | | | | |
Schlumberger Ltd. | | | | | | | 55,400 | | | $ | 3,113,480 | | |
Transocean Ltd.b | | | | | | | 29,168 | | | | 2,212,101 | | |
| | | | | | | 5,325,581 | | |
TOTAL ENERGY | | | | | | | | | | | 32,693,677 | | |
FINANCIAL | | | 21.5 | % | | | | | | | | | |
BANK | | | 8.4 | % | | | | | | | | | |
Bank of America Corp. | | | | | | | 193,100 | | | | 3,396,629 | | |
Bank of New York Mellon Corp. | | | | | | | 56,900 | | | | 1,684,809 | | |
HSBC Holdings PLC (ADR) (United Kingdom) | | | | | | | 16,400 | | | | 884,288 | | |
SunTrust Banks | | | | | | | 43,124 | | | | 1,007,808 | | |
Toronto-Dominion Bank (Canada) | | | | | | | 28,400 | | | | 1,751,712 | | |
US Bancorp | | | | | | | 138,129 | | | | 3,124,478 | | |
Wells Fargo & Co. | | | | | | | 129,000 | | | | 3,550,080 | | |
| | | | | | | 15,399,804 | | |
DIVERSIFIED FINANCIAL SERVICE | | | 7.1 | % | | | | | | | | | |
BlackRock | | | | | | | 15,600 | | | | 3,113,292 | | |
Franklin Resources | | | | | | | 11,500 | | | | 1,073,295 | | |
Goldman Sachs Group | | | | | | | 16,000 | | | | 2,647,360 | | |
JPMorgan Chase & Co. | | | | | | | 121,800 | | | | 5,293,428 | | |
Morgan Stanley | | | | | | | 27,000 | | | | 781,920 | | |
| | | | | | | 12,909,295 | | |
INSURANCE | | | 6.0 | % | | | | | | | | | |
ACE Ltd. | | | | | | | 49,100 | | | | 2,562,038 | | |
Everest Re Group Ltd. | | | | | | | 20,000 | | | | 1,686,200 | | |
HCC Insurance Holdings | | | | | | | 117,200 | | | | 3,098,768 | | |
MetLife | | | | | | | 94,600 | | | | 3,572,096 | | |
| | | | | | | 10,919,102 | | |
TOTAL FINANCIAL | | | | | | | | | | | 39,228,201 | | |
See accompanying notes to financial statements.
10
COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
HEALTH CARE | | | 9.6 | % | | | | | | | | | |
HEALTHCARE PRODUCTS | | | 4.5 | % | | | | | | | | | |
Becton Dickinson & Co. | | | | | | | 25,700 | | | $ | 1,789,234 | | |
Covidien Ltd. | | | | | | | 18,500 | | | | 732,045 | | |
Johnson & Johnson | | | | | | | 58,800 | | | | 3,553,872 | | |
Medtronic | | | | | | | 55,800 | | | | 2,137,140 | | |
| | | | | | | 8,212,291 | | |
PHARMACEUTICAL | | | 5.1 | % | | | | | | | | | |
Abbott Laboratories | | | | | | | 77,000 | | | | 3,482,710 | | |
Pfizer | | | | | | | 132,200 | | | | 2,207,740 | | |
Teva Pharmaceutical Industries Ltd. (ADR) (Israel) | | | | | | | 69,200 | | | | 3,563,800 | | |
| | | | | | | 9,254,250 | | |
TOTAL HEALTH CARE | | | | | | | | | | | 17,466,541 | | |
INDUSTRIAL | | | 9.1 | % | | | | | | | | | |
AEROSPACE & DEFENSE | | | 5.2 | % | | | | | | | | | |
Boeing Co. | | | | | | | 8,900 | | | | 442,063 | | |
General Dynamics Corp. | | | | | | | 51,600 | | | | 3,054,204 | | |
L-3 Communications Holdings | | | | | | | 36,000 | | | | 2,678,400 | | |
Lockheed Martin Corp. | | | | | | | 44,600 | | | | 3,344,108 | | |
| | | | | | | 9,518,775 | | |
DIVERSIFIED MANUFACTURING | | | 2.5 | % | | | | | | | | | |
3M Co. | | | | | | | 11,600 | | | | 836,360 | | |
Caterpillar | | | | | | | 18,100 | | | | 820,111 | | |
General Electric Co. | | | | | | | 208,800 | | | | 2,902,320 | | |
| | | | | | | 4,558,791 | | |
TRANSPORTATION | | | 1.4 | % | | | | | | | | | |
Norfolk Southern Corp. | | | | | | | 22,100 | | | | 1,013,727 | | |
United Parcel Service | | | | | | | 30,100 | | | | 1,609,146 | | |
| | | | | | | 2,622,873 | | |
TOTAL INDUSTRIAL | | | | | | | | | | | 16,700,439 | | |
See accompanying notes to financial statements.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
REAL ESTATE | | | 2.1 | % | | | | | | | | | |
OFFICE | | | 1.1 | % | | | | | | | | | |
Alexandria Real Estate Equities | | | | | | | 6,300 | | | $ | 350,973 | | |
Corporate Office Properties Trust | | | | | | | 22,200 | | | | 818,292 | | |
Hongkong Land Holdings Ltd. (USD) (Singapore)a | | | | | | | 220,000 | | | | 894,518 | | |
| | | | | | | 2,063,783 | | |
SELF STORAGE | | | 0.2 | % | | | | | | | | | |
Public Storage | | | | | | | 4,300 | | | | 303,365 | | |
SHOPPING CENTER—REGIONAL MALL | | | 0.8 | % | | | | | | | | | |
Simon Property Group | | | | | | | 24,079 | | | | 1,531,906 | | |
TOTAL REAL ESTATE | | | | | | | | | | | 3,899,054 | | |
TECHNOLOGY | | | 10.3 | % | | | | | | | | | |
COMPUTERS | | | 1.4 | % | | | | | | | | | |
International Business Machines Corp. | | | | | | | 22,500 | | | | 2,656,125 | | |
IT SERVICES | | | 0.7 | % | | | | | | | | | |
Automatic Data Processing | | | | | | | 34,600 | | | | 1,326,910 | | |
SEMICONDUCTORS | | | 1.8 | % | | | | | | | | | |
Intel Corp. | | | | | | | 69,200 | | | | 1,406,144 | | |
Microchip Technology | | | | | | | 67,900 | | | | 1,802,745 | | |
| | | | | | | 3,208,889 | | |
SOFTWARE | | | 2.8 | % | | | | | | | | | |
Microsoft Corp. | | | | | | | 124,800 | | | | 3,076,320 | | |
Oracle Corp. | | | | | | | 93,700 | | | | 2,049,219 | | |
| | | | | | | 5,125,539 | | |
TELECOMMUNICATION EQUIPMENT | | | 3.6 | % | | | | | | | | | |
Corning | | | | | | | 84,500 | | | | 1,274,260 | | |
Harris Corp. | | | | | | | 75,900 | | | | 2,636,007 | | |
QUALCOMM | | | | | | | 56,900 | | | | 2,641,298 | | |
| | | | | | | 6,551,565 | | |
TOTAL TECHNOLOGY | | | | | | | | | | | 18,869,028 | | |
See accompanying notes to financial statements.
12
COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | Number of Shares | | Value | |
TELECOMMUNICATIONS | | | 3.6 | % | | | | | | | | | |
AT&T | | | | | | | 145,400 | | | $ | 3,787,670 | | |
China Mobile Ltd. (ADR) (Hong Kong) | | | | | | | 17,500 | | | | 861,350 | | |
Verizon Communications | | | | | | | 61,700 | | | | 1,915,168 | | |
| | | | | | | 6,564,188 | | |
UTILITY | | | 5.0 | % | | | | | | | | | |
ELECTRIC—INTEGRATED | | | 4.1 | % | | | | | | | | | |
E.ON AG (ADR) (Germany) | | | | | | | 30,500 | | | | 1,291,675 | | |
Exelon Corp. | | | | | | | 35,300 | | | | 1,765,706 | | |
FPL Group | | | | | | | 78,700 | | | | 4,421,366 | | |
| | | | | | | 7,478,747 | | |
MULTI UTILITIES | | | 0.9 | % | | | | | | | | | |
Sempra Energy | | | | | | | 32,500 | | | | 1,630,525 | | |
TOTAL UTILITY | | | | | | | | | | | 9,109,272 | | |
TOTAL COMMON STOCK (Identified cost—$176,394,062) | | | | | | | | | | | 176,308,645 | | |
SHORT-TERM INVESTMENTS | | | 8.5 | % | | | | | | | | | |
MONEY MARKET FUNDS | |
Dreyfus Treasury Cash Management Fund, 0.01%c | | | | | | | 6,450,201 | | | | 6,450,201 | | |
Federated U.S. Treasury Cash Reserves Fund, 0.01%c | | | | | | | 7,407,209 | | | | 7,407,209 | | |
Fidelity Institutional Money Market Treasury Only Fund, 0.11%c | | | | | | | 1,703,223 | | | | 1,703,223 | | |
TOTAL SHORT-TERM INVESTMENTS (Identified cost—$15,560,633) | | | | | | | | | | | 15,560,633 | | |
See accompanying notes to financial statements.
13
COHEN & STEERS DIVIDEND VALUE FUND, INC.
SCHEDULE OF INVESTMENTS—(Continued)
August 31, 2009 (Unaudited)
| | | | | | Value | |
TOTAL INVESTMENTS (Identified cost—$191,954,695) | | | 105.1 | % | | | | $ | 191,869,278 | | |
LIABILITIES IN EXCESS OF OTHER ASSETS | | | (5.1 | )% | | | | | (9,350,328 | ) | |
NET ASSETS | | | 100.0 | % | | | | $ | 182,518,950 | | |
Glossary of Portfolio Abbreviations
ADR American Depositary Receipt
USD United States Dollar
Note: Percentages indicated are based on the net assets of the Fund.
a Fair valued security. This security has been valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. Aggregate fair value securities represent 4.8% of net assets of the Fund, all of which have been fair valued pursuant to foreign security fair value pricing procedures approved by the Board of Directors.
b Non-income producing security.
c Rate quoted represents the seven day yield of the fund.
See accompanying notes to financial statements.
14
COHEN & STEERS DIVIDEND VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2009 (Unaudited)
ASSETS: | |
Investments in securities, at value (Identified cost—$191,954,695) | | $ | 191,869,278 | | |
Cash | | | 97,103 | | |
Receivable for: | |
Investment securities sold | | | 803,872 | | |
Dividends and interest | | | 485,153 | | |
Fund shares sold | | | 214,706 | | |
Other assets | | | 8,331 | | |
Total Assets | | | 193,478,443 | | |
LIABILITIES: | |
Payable for: | |
Investment securities purchased | | | 10,355,817 | | |
Fund shares redeemed | | | 399,852 | | |
Investment advisory fees | | | 36,269 | | |
Directors' fees | | | 8,325 | | |
Administration fees | | | 5,811 | | |
Distribution fees | | | 4,875 | | |
Shareholder servicing fees | | | 1,739 | | |
Other liabilities | | | 146,805 | | |
Total Liabilities | | | 10,959,493 | | |
NET ASSETS | | $ | 182,518,950 | | |
NET ASSETS consist of: | |
Paid-in-capital | | $ | 218,187,109 | | |
Accumulated undistributed net investment income | | | 276,552 | | |
Accumulated net realized loss | | | (35,858,817 | ) | |
Net unrealized depreciation | | | (85,894 | ) | |
| | $ | 182,518,950 | | |
See accompanying notes to financial statements.
15
COHEN & STEERS DIVIDEND VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES—(Continued)
August 31, 2009 (Unaudited)
CLASS A SHARES: | |
NET ASSETS | | $ | 62,067,743 | | |
Shares issued and outstanding ($0.001 par value common stock outstanding) | | | 6,157,500 | | |
Net asset value and redemption price per share | | $ | 10.08 | | |
Maximum offering price per share ($10.08 ÷ 0.955)a | | $ | 10.55 | | |
CLASS C SHARES: | |
NET ASSETS | | $ | 37,918,515 | | |
Shares issued and outstanding ($0.001 par value common stock outstanding) | | | 3,780,500 | | |
Net asset value and offering price per shareb | | $ | 10.03 | | |
CLASS I SHARES: | |
NET ASSETS | | $ | 82,532,692 | | |
Shares issued and outstanding ($0.001 par value common stock outstanding) | | | 8,180,140 | | |
Net asset value, offering, and redemption price per share | | $ | 10.09 | | |
a On investments of $100,000 or more, the offering price is reduced.
b Redemption price per share is equal to the net asset value per share less any applicable deferred sales charge of 1% on shares held for less than one year.
See accompanying notes to financial statements.
16
COHEN & STEERS DIVIDEND VALUE FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended August 31, 2009 (Unaudited)
Investment Income: | |
Dividend income (net of $46,915 of foreign withholding tax) | | $ | 2,122,298 | | |
Expenses: | |
Investment advisory fees | | | 595,135 | | |
Distribution fees—Class A | | | 68,267 | | |
Distribution fees—Class C | | | 134,703 | | |
Administration fees | | | 79,964 | | |
Shareholder servicing fees—Class A | | | 27,307 | | |
Shareholder servicing fees—Class C | | | 44,901 | | |
Transfer agent fees and expenses | | | 67,063 | | |
Registration and filing fees | | | 47,276 | | |
Professional fees | | | 46,340 | | |
Directors' fees and expenses | | | 24,628 | | |
Custodian fees and expenses | | | 18,969 | | |
Shareholder reporting expenses | | | 12,200 | | |
Line of credit fees | | | 6,609 | | |
Miscellaneous | | | 8,562 | | |
Total Expenses | | | 1,181,924 | | |
Reduction of Expenses (See Note 2) | | | (311,612 | ) | |
Net Expenses | | | 870,312 | | |
Net Investment Income | | | 1,251,986 | | |
Net Realized and Unrealized Gain (Loss): | |
Net realized loss on: | |
Investments | | | (8,296,282 | ) | |
Foreign currency transactions | | | (334 | ) | |
Net realized loss | | | (8,296,616 | ) | |
Net change in unrealized depreciation on: | |
Investments | | | 48,416,903 | | |
Foreign currency translations | | | 410 | | |
Net change in unrealized depreciation | | | 48,417,313 | | |
Net realized and unrealized gain | | | 40,120,697 | | |
Net Increase in Net Assets Resulting from Operations | | $ | 41,372,683 | | |
See accompanying notes to financial statements.
17
COHEN & STEERS DIVIDEND VALUE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
| | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | |
Change in Net Assets: | |
From Operations: | |
Net investment income | | $ | 1,251,986 | | | $ | 2,191,567 | | |
Net realized loss | | | (8,296,616 | ) | | | (25,405,989 | ) | |
Net change in unrealized appreciation/(depreciation) | | | 48,417,313 | | | | (47,311,971 | ) | |
Net increase (decrease) in net assets resulting from operations | | | 41,372,683 | | | | (70,526,393 | ) | |
Dividends to Shareholders from Net Investment Income: | |
Class A | | | (487,750 | ) | | | (942,177 | ) | |
Class C | | | (203,321 | ) | | | (395,498 | ) | |
Class I | | | (593,534 | ) | | | (641,852 | ) | |
Total dividends to shareholders | | | (1,284,605 | ) | | | (1,979,527 | ) | |
Capital Stock Transactions: | |
Increase in net assets from Fund share transactions | | | 21,215,329 | | | | 69,414,543 | | |
Total increase (decrease) in net assets | | | 61,303,407 | | | | (3,091,377 | ) | |
Net Assets: | |
Beginning of period | | | 121,215,543 | | | | 124,306,920 | | |
End of perioda | | $ | 182,518,950 | | | $ | 121,215,543 | | |
a Includes undistributed net investment income of $276,552 and $309,171, respectively.
See accompanying notes to financial statements.
18
COHEN & STEERS DIVIDEND VALUE FUND, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
The following table includes selected data for a share outstanding throughout each period and other performance information derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.
| | Class A | |
Per Share Operating Performance: | | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | | For the Year Ended February 29, 2008 | | For the Year Ended February 28, 2007 | | For the Period August 31, 2005a through February 28, 2006 | |
Net asset value, beginning of period | | $ | 7.59 | | | $ | 13.57 | | | $ | 13.99 | | | $ | 12.26 | | | $ | 11.46 | | |
Income from investment operations: | |
Net investment incomeb | | | 0.08 | | | | 0.20 | | | | 0.23 | | | | 0.22 | | | | 0.07 | | |
Net realized and unrealized gain (loss) | | | 2.49 | | | | (5.99 | ) | | | (0.17 | ) | | | 1.86 | | | | 0.77 | | |
Total from investment operations | | | 2.57 | | | | (5.79 | ) | | | 0.06 | | | | 2.08 | | | | 0.84 | | |
Less dividends and distributions to shareholders from: | |
Net investment income | | | (0.08 | ) | | | (0.19 | ) | | | (0.21 | ) | | | (0.18 | ) | | | (0.04 | ) | |
Net realized gain | | | — | | | | — | | | | (0.28 | ) | | | (0.17 | ) | | | — | | |
Total dividends and distributions to shareholders | | | (0.08 | ) | | | (0.19 | ) | | | (0.49 | ) | | | (0.35 | ) | | | (0.04 | ) | |
Redemption fees retained by the Fund | | | 0.00 | c | | | 0.00 | c | | | 0.01 | | | | 0.00 | c | | | 0.00 | c | |
Net increase (decrease) in net asset value | | | 2.49 | | | | (5.98 | ) | | | (0.42 | ) | | | 1.73 | | | | 0.80 | | |
Net asset value, end of period | | $ | 10.08 | | | $ | 7.59 | | | $ | 13.57 | | | $ | 13.99 | | | $ | 12.26 | | |
Total investment returnd | | | 34.05 | %e | | | –43.14 | % | | | 0.33 | % | | | 17.12 | % | | | 7.29 | %e | |
Ratios/Supplemental Data: | |
Net assets, end of period (in millions) | | $ | 62.1 | | | $ | 45.2 | | | $ | 61.9 | | | $ | 41.7 | | | $ | 6.6 | | |
Ratio of expenses to average daily net assets (before expense reduction) | | | 1.57 | %g | | | 1.57 | % | | | 1.63 | % | | | 2.33 | %f | | | 7.02 | %g | |
Ratio of expenses to average daily net assets (net of expense reduction) | | | 1.15 | %g | | | 1.15 | % | | | 1.00 | % | | | 1.00 | % | | | 1.28 | %g | |
Ratio of net investment income (loss) to average daily net assets (before expense reduction) | | | 1.28 | %g | | | 1.35 | % | | | 0.95 | % | | | 0.30 | % | | | (4.66 | )%g | |
Ratio of net investment income to average daily net assets (net of expense reduction) | | | 1.69 | %g | | | 1.76 | % | | | 1.59 | % | | | 1.63 | % | | | 1.08 | %g | |
Portfolio turnover rate | | | 18 | %e | | | 43 | % | | | 52 | % | | | 30 | % | | | 8 | %e | |
a Commencement of operations.
b Calculation based on average shares outstanding.
c Amount is less than $0.005.
d Does not reflect sales charges, which would reduce return.
e Not annualized.
f Due to the significant growth of net assets on a small asset base, the expense ratio, when averaged over the year, differs from the Fund's other classes by an amount other than class specific expenses. Typically, the ratios between classes will only differ by the class specific expenses (i.e., distribution fees and shareholder servicing fees).
g Annualized.
See accompanying notes to financial statements.
19
COHEN & STEERS DIVIDEND VALUE FUND, INC.
FINANCIAL HIGHLIGHTS (Unaudited)—(Continued)
| | Class C | |
Per Share Operating Performance: | | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | | For the Year Ended February 29, 2008 | | For the Year Ended February 28, 2007 | | For the Period August 31, 2005a through February 28, 2006 | |
Net asset value, beginning of period | | $ | 7.55 | | | $ | 13.50 | | | $ | 13.94 | | | $ | 12.23 | | | $ | 11.46 | | |
Income from investment operations: | |
Net investment incomeb | | | 0.05 | | | | 0.13 | | | | 0.14 | | | | 0.14 | | | | 0.03 | | |
Net realized and unrealized gain (loss) | | | 2.48 | | | | (5.96 | ) | | | (0.18 | ) | | | 1.86 | | | | 0.77 | | |
Total from investment operations | | | 2.53 | | | | (5.83 | ) | | | (0.04 | ) | | | 2.00 | | | | 0.80 | | |
Less dividends and distributions to shareholders from: | |
Net investment income | | | (0.05 | ) | | | (0.12 | ) | | | (0.14 | ) | | | (0.12 | ) | | | (0.03 | ) | |
Net realized gain | | | — | | | | — | | | | (0.28 | ) | | | (0.17 | ) | | | — | | |
Total dividends and distributions to shareholders | | | (0.05 | ) | | | (0.12 | ) | | | (0.42 | ) | | | (0.29 | ) | | | (0.03 | ) | |
Redemption fees retained by the Fund | | | 0.00 | c | | | 0.00 | c | | | 0.02 | | | | 0.00 | c | | | 0.00 | c | |
Net increase (decrease) in net asset value | | | 2.48 | | | | (5.95 | ) | | | (0.44 | ) | | | 1.71 | | | | 0.77 | | |
Net asset value, end of period | | $ | 10.03 | | | $ | 7.55 | | | $ | 13.50 | | | $ | 13.94 | | | $ | 12.23 | | |
Total investment returnd | | | 33.63 | %e | | | –43.50 | % | | | –0.35 | % | | | 16.40 | % | | | 6.96 | %e | |
Ratios/Supplemental Data: | |
Net assets, end of period (in millions) | | $ | 37.9 | | | $ | 31.4 | | | $ | 41.2 | | | $ | 14.7 | | | $ | 3.8 | | |
Ratio of expenses to average daily net assets (before expense reduction) | | | 2.21 | %g | | | 2.22 | % | | | 2.27 | % | | | 3.21 | %f | | | 7.93 | %g | |
Ratio of expenses to average daily net assets (net of expense reduction) | | | 1.80 | %g | | | 1.80 | % | | | 1.65 | % | | | 1.65 | % | | | 1.95 | %g | |
Ratio of net investment income (loss) to average daily net assets (before expense reduction) | | | 0.63 | %g | | | 0.72 | % | | | 0.33 | % | | | (0.50 | )% | | | (5.53 | )%g | |
Ratio of net investment income to average daily net assets (net of expense reduction) | | | 1.04 | %g | | | 1.14 | % | | | 0.96 | % | | | 1.06 | % | | | 0.45 | %g | |
Portfolio turnover rate | | | 18 | %e | | | 43 | % | | | 52 | % | | | 30 | % | | | 8 | %e | |
a Commencement of operations.
b Calculation based on average shares outstanding.
c Amount is less than $0.005.
d Does not reflect sales charges, which would reduce return.
e Not annualized.
f Due to the significant growth of net assets on a small asset base, the expense ratio, when averaged over the year, differs from the Fund's other classes by an amount other than class specific expenses. Typically, the ratios between classes will only differ by the class specific expenses (i.e., distribution fees and shareholder servicing fees).
g Annualized.
See accompanying notes to financial statements.
20
COHEN & STEERS DIVIDEND VALUE FUND, INC.
FINANCIAL HIGHLIGHTS (Unaudited)—(Continued)
| | Class I | |
Per Share Operating Performance: | | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | | For the Year Ended February 29, 2008 | | For the Year Ended February 28, 2007 | | For the Period August 31, 2005a through February 28, 2006 | |
Net asset value, beginning of period | | $ | 7.59 | | | $ | 13.58 | | | $ | 14.00 | | | $ | 12.27 | | | $ | 11.46 | | |
Income from investment operations: | |
Net investment incomeb | | | 0.09 | | | | 0.24 | | | | 0.28 | | | | 0.27 | | | | 0.09 | | |
Net realized and unrealized gain (loss) | | | 2.51 | | | | (5.99 | ) | | | (0.18 | ) | | | 1.87 | | | | 0.76 | | |
Total from investment operations | | | 2.60 | | | | (5.75 | ) | | | 0.10 | | | | 2.14 | | | | 0.85 | | |
Less dividends and distributions to shareholders from: | |
Net investment income | | | (0.10 | ) | | | (0.24 | ) | | | (0.26 | ) | | | (0.24 | ) | | | (0.04 | ) | |
Net realized gain | | | — | | | | — | | | | (0.28 | ) | | | (0.17 | ) | | | — | | |
Total dividends and distributions to shareholders | | | (0.10 | ) | | | (0.24 | ) | | | (0.54 | ) | | | (0.41 | ) | | | (0.04 | ) | |
Redemption fees retained by the Fund | | | 0.00 | c | | | 0.00 | c | | | 0.02 | | | | 0.00 | c | | | 0.00 | c | |
Net increase (decrease) in net asset value | | | 2.50 | | | | (5.99 | ) | | | (0.42 | ) | | | 1.73 | | | | 0.81 | | |
Net asset value, end of period | | $ | 10.09 | | | $ | 7.59 | | | $ | 13.58 | | | $ | 14.00 | | | $ | 12.27 | | |
Total investment return | | | 34.40 | %d | | | –42.98 | % | | | 0.65 | % | | | 17.63 | % | | | 7.42 | %d | |
Ratios/Supplemental Data: | |
Net assets, end of period (in millions) | | $ | 82.5 | | | $ | 44.6 | | | $ | 21.2 | | | $ | 9.4 | | | $ | 3.7 | | |
Ratio of expenses to average daily net assets (before expense reduction) | | | 1.23 | %f | | | 1.23 | % | | | 1.28 | % | | | 2.27 | %e | | | 11.99 | %f | |
Ratio of expenses to average daily net assets (net of expense reduction) | | | 0.80 | %f | | | 0.80 | % | | | 0.65 | % | | | 0.65 | % | | | 1.07 | %f | |
Ratio of net investment income (loss) to average daily net assets (before expense reduction) | | | 1.64 | %f | | | 1.81 | % | | | 1.31 | % | | | 0.45 | % | | | (9.43 | )%f | |
Ratio of net investment income to average daily net assets (net of expense reduction) | | | 2.07 | %f | | | 2.24 | % | | | 1.94 | % | | | 2.06 | % | | | 1.49 | %f | |
Portfolio turnover rate | | | 18 | %d | | | 43 | % | | | 52 | % | | | 30 | % | | | 8 | %d | |
a Commencement of operations.
b Calculation based on average shares outstanding.
c Amount is less than $0.005.
d Not annualized.
e Due to the significant growth of net assets on a small asset base, the expense ratio, when averaged over the year, differs from the Fund's other classes by an amount other than class specific expenses. Typically, the ratios between classes will only differ by the class specific expenses (i.e., distribution fees and shareholder servicing fees).
f Annualized.
See accompanying notes to financial statements.
21
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Note 1. Significant Accounting Policies
Cohen & Steers Dividend Value Fund, Inc. (the Fund) was incorporated under the laws of the State of Maryland on November 9, 2004 and is registered under the Investment Company Act of 1940, as amended, as a nondiversified, open-end management investment company. The Fund's investment objective is high level of current income and long term growth of income and capital appreciation. The authorized shares of the Fund are divided into three classes designated Class A, C and I shares. Each of the Fund's shares has equal dividend, liquidation and voting rights (except for matters relating to distributions and shareholder servicing of such shares).
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Portfolio Valuation: Investments in securities that are listed on the New York Stock Exchange are valued, except as indicated below, at the last sale price reflected at the close of the New York Stock Exchange on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day or, if no asked price is available, at the bid price.
Securities not listed on the New York Stock Exchange but listed on other domestic or foreign securities exchanges or admitted to trading on the National Association of Securities Dealers Automated Quotations, Inc. (Nasdaq) national market system are valued in a similar manner. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the tape at the close of the exchange representing the principal market for such securities. If after the close of a foreign market, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors.
Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by Cohen & Steers Capital Management, Inc. (the advisor) to be over-the-counter, are valued at the official closing prices as reported by sources as the Board of Directors deem appropriate to reflect their fair market value. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day, or if no asked price is available, at the bid price. However, certain fixed-income securities may be valued on the basis of prices provided by a pricing service when such prices are believed by the Board of Directors to reflect the fair market value of such securities.
Securities for which market prices are unavailable, or securities for which the advisor determines that bid and/or asked price does not reflect market value, will be valued at fair value pursuant to procedures approved by
22
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
the Fund's Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include, but are not limited to, recent transactions in comparable securities, information relating to the specific security and developments in the markets.
The Fund's use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.
Short-term debt securities with a maturity date of 60 days or less are valued at amortized cost, which approximates value.
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective March 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. FAS 157 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund's investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.
• Level 1—quoted prices in active markets for identical investments
• Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
• Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards Staff Position No. 157-4 "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"), effective June 15, 2009. FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
23
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund's investments carried at value:
| | Fair Value Measurements at August 31, 2009 Using | |
| | Total | | Quoted Prices In Active Market for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | |
Common Stock—Consumer Cyclical | | $ | 10,754,844 | | | $ | 9,772,061 | | | $ | 982,783 | | | | — | | |
Common Stock—Consumer Non-Cyclical | | | 15,623,068 | | | | 15,244,207 | | | | 378,861 | | | | — | | |
Common Stock—Energy | | | 32,693,677 | | | | 26,147,037 | | | | 6,546,640 | | | | — | | |
Common Stock—Real Estate | | | 3,899,054 | | | | 3,004,536 | | | | 894,518 | | | | — | | |
Common Stock—Other Industries | | | 113,338,002 | | | | 113,338,002 | | | | — | | | | — | | |
Money Market Funds | | | 15,560,633 | | | | — | | | | 15,560,633 | | | | — | | |
Total Investments | | $ | 191,869,278 | | | $ | 167,505,843 | | | $ | 24,363,435 | | | | — | | |
Security Transactions, Investment Income and Expense Allocations: Security transactions are recorded on trade date. Realized gains and losses on investments sold are recorded on the basis of identified cost. Interest income is recorded on the accrual basis. Discounts are accreted and premiums are amortized over the life of the respective securities. Dividend income is recorded on the ex-dividend date, except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Foreign Currency Translations: The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, other assets and liabilities and foreign currency contracts are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the exchange rates prevailing on the respective dates of such transactions. The resultant exchange gains and losses are recorded as realized and unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gain/loss are included in or are a reduction of ordinary income for federal income tax purposes. The Fund does not isolate that portion of the results of operations arising as a resul t of changes in the foreign exchange rates from the changes in the market prices of the securities.
Foreign Securities: The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information
24
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Dividends and Distributions to Shareholders: Dividends from net investment income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, unless offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are automatically reinvested in full and fractional shares of the Fund based on the net asset value per share at the close of business on the payable date unless the shareholder has elected to have them paid in cash.
Income Taxes: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interest of the shareholders, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, and by distributing substantially all of its taxable earnings to its shareholders. Accordingly, no provision for federal income or excise tax is necessary. The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position must meet before being recognized in the financial statements. An assessment of the Fund's tax positions has been made and it has been determined that there is no impact to the Fund's financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Note 2. Investment Advisory and Administration Fees and Other Transactions with Affiliates
Investment Advisory Fees: The advisor serves as the Fund's investment advisor pursuant to an investment advisory agreement (the investment advisory agreement). Under the terms of the investment advisory agreement, the advisor provides the Fund with the day-to-day investment decisions and generally manages the Fund's investments in accordance with the stated policies of the Fund, subject to the supervision of the Fund's Board of Directors.
For the services provided to the Fund, the advisor receives a fee, accrued daily and paid monthly, at the annual rate of 0.80% of the average daily net assets of the Fund for the first $1.5 billion and 0.70% thereafter of the average daily net assets of the Fund.
For the six months ended August 31, 2009 and through February 28, 2010, the advisor has contractually agreed to waive its fee and/or reimburse the Fund for expenses incurred to the extent necessary to maintain the Fund's operating expenses at 1.15% for Class A shares, 1.80% for Class C shares and 0.80% for Class I shares.
25
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
Administration Fees: The Fund has entered into an administration agreement with the advisor under which the advisor performs certain administrative functions for the Fund and receives a fee, accrued daily and paid monthly, at the annual rate of 0.04% of the Fund's average daily net assets. For the six months ended August 31, 2009, the Fund paid the advisor $29,757 in fees under this administration agreement. Additionally, the Fund pays State Street Bank and Trust Company as sub-administrator under a fund accounting and administration agreement.
Distribution Fees: Shares of the Fund are distributed by Cohen & Steers Securities, LLC (the distributor), an affiliated entity of the advisor. The Fund has adopted a distribution plan (the plan) pursuant to Rule 12b-1 under the Investment Company Act of 1940. The plan provides that the Fund will pay the distributor a fee at an annual rate of up to 0.25% of the average daily net assets attributable to the Class A shares and up to 0.75% of the average daily net assets attributable to the Class C shares.
For the six months ended August 31, 2009, the Fund has been advised that the distributor received $6,212 in sales commissions from the sale of Class A shares and that the distributor also received $7,232 of contingent deferred sales charges relating to redemptions of Class C shares. The distributor has advised the Fund that proceeds from the contingent deferred sales charges are paid to the distributor and are used by the distributor to defray its expenses related to providing distribution-related services to the Fund in connection with the sale of this class, including payments to dealers and other financial intermediaries for selling this class and interest and other financing costs associated with this class.
Shareholder Servicing Fees: The Fund has adopted a shareholder services plan which provides that the Fund may obtain the services of qualified financial institutions to act as shareholder servicing agents for their customers. For these services, the Fund may pay the shareholder servicing agent a fee, accrued daily and paid monthly, at an annual rate of up to 0.10% of the average daily net asset value of the Fund's Class A shares and up to 0.25% of the average daily net asset value of the Fund's Class C shares.
Directors' and Officers' Fees: Certain directors and officers of the Fund are also directors, officers, and/or employees of the advisor. The Fund does not pay compensation to any affiliated directors and officers except for the Chief Compliance Officer, who received $1,696 from the Fund for the six months ended August 31, 2009.
Note 3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, for the six months ended August 31, 2009, totaled $46,073,723 and $25,976,758, respectively.
26
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
Note 4. Income Tax Information
As of August 31, 2009, the federal tax cost and net unrealized depreciation on securities were as follows:
Gross unrealized appreciation | | $ | 10,520,354 | | |
Gross unrealized depreciation | | | (10,605,771 | ) | |
Net unrealized depreciation | | $ | (85,417 | ) | |
Cost for federal income tax purposes | | $ | 191,954,695 | | |
As of February 28, 2009, the Fund had a net capital loss carryforward of $14,244,984, which will expire on February 28, 2017. This carryforward may be used to offset future capital gains to the extent provided by regulations. In addition, the Fund incurred capital and currency losses of $11,337,263 and $8,974, respectively, after October 31, 2008, which are not recognized until the following fiscal year.
Note 5. Capital Stock
The Fund is authorized to issue 200 million shares of capital stock, at a par value of $0.001 per share. The Board of Directors of the Fund may increase or decrease the aggregate number of shares of common stock that the Fund has authority to issue. Transactions in Fund shares were as follows:
| | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | |
| | Shares | | Amount | | Shares | | Amount | |
CLASS A: | |
Sold | | | 1,404,786 | | | $ | 12,487,082 | | | | 4,374,278 | | | $ | 49,160,694 | | |
Issued as reinvestment of dividends | | | 34,851 | | | | 304,587 | | | | 41,690 | | | | 478,532 | | |
Redeemed | | | (1,238,860 | ) | | | (10,795,591 | ) | | | (3,023,937 | ) | | | (35,115,572 | ) | |
Redemption fees retained by the Funda | | | — | | | | 1,545 | | | | — | | | | 12,660 | | |
Net increase | | | 200,777 | | | $ | 1,997,623 | | | | 1,392,031 | | | $ | 14,536,314 | | |
27
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
| | For the Six Months Ended August 31, 2009 | | For the Year Ended February 28, 2009 | |
| | Shares | | Amount | | Shares | | Amount | |
CLASS C: | |
Sold | | | 529,826 | | | $ | 4,699,264 | | | | 2,370,555 | | | $ | 25,064,620 | | |
Issued as reinvestment of dividends | | | 6,994 | | | | 60,937 | | | | 8,751 | | | | 97,621 | | |
Redeemed | | | (913,571 | ) | | | (8,018,055 | ) | | | (1,273,616 | ) | | | (14,005,094 | ) | |
Redemption fees retained by the Funda | | | — | | | | 1,010 | | | | — | | | | 8,208 | | |
Net increase (decrease) | | | (376,751 | ) | | $ | (3,256,844 | ) | | | 1,105,690 | | | $ | 11,165,355 | | |
CLASS I: | |
Sold | | | 3,002,229 | | | $ | 28,592,441 | | | | 5,139,152 | | | $ | 52,628,560 | | |
Issued as reinvestment of dividends | | | 60,446 | | | | 528,563 | | | | 47,911 | | | | 529,342 | | |
Redeemed | | | (764,971 | ) | | | (6,648,147 | ) | | | (862,394 | ) | | | (9,451,574 | ) | |
Redemption fees retained by the Funda | | | — | | | | 1,693 | | | | — | | | | 6,546 | | |
Net increase | | | 2,297,704 | | | $ | 22,474,550 | | | | 4,324,669 | | | $ | 43,712,874 | | |
a The Fund may charge a 2% redemption fee on shares sold within 60 days of the time of purchase. Redemption fees are paid directly to the Fund.
Note 6. Borrowings
The Fund, in conjunction with other Cohen & Steers funds, is a party to a $200,000,000 syndicated credit agreement (the credit agreement) with State Street Bank and Trust Company, as administrative agent and operations agent, and the lenders identified in the credit agreement, which expires December 2009. The Fund pays a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the credit agreement.
During the six months ended August 31, 2009, the Fund did not borrow under the credit agreement.
28
COHEN & STEERS DIVIDEND VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)
Note 7. Other
In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.
Note 8. Subsequent Events
In May 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 165, Subsequent Events (FAS 165), effective for interim or annual periods ending after June 15, 2009. The FASB has established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.
With regard to the Fund's financial statements, subsequent to August 31, 2009 and through October 12, 2009, there have been no recognized subsequent events (subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet) nor have there been any nonrecognized subsequent events (subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet but before the financial statements are issued or are available to be issued).
29
COHEN & STEERS DIVIDEND VALUE FUND, INC.
OTHER INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 800-330-7348, (ii) on our Web site at cohenandsteers.com or (iii) on the Securities and Exchange Commission's Web site at http://www.sec.gov. In addition, the Fund's proxy voting record for the most recent 12-month period ended June 30 is available (i) without charge, upon request, by calling 800-330-7348 or (ii) on the SEC's Web site at http://www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available (i) without charge, upon request by calling 800-330-7348, or (ii) on the SEC's Web site at http://www.sec.gov. In addition, the Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.
Please note that the distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes. The Fund may also pay distributions in excess of the Fund's net investment company taxable income and this excess would be a tax-free return of capital distributed from the Fund's assets. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are mailed after the close of each calendar year.
30
COHEN & STEERS DIVIDEND VALUE FUND, INC.
Meet the Cohen & Steers family of open-end funds:
COHEN & STEERS
GLOBAL REALTY SHARES
• Designed for investors seeking total return, investing primarily in global real estate equity securities
• Symbols: CSFAX, CSFBX, CSFCX, CSSPX
COHEN & STEERS
INSTITUTIONAL GLOBAL REALTY SHARES
• Designed for institutional investors seeking total return, investing primarily in global real estate securities
• Symbol: GRSIX
COHEN & STEERS
REALTY SHARES
• Designed for investors seeking total return, investing primarily in REITs
• Symbol: CSRSX
COHEN & STEERS
INSTITUTIONAL REALTY SHARES
• Designed for institutional investors seeking total return, investing primarily in REITs
• Symbol: CSRIX
COHEN & STEERS
REALTY INCOME FUND
• Designed for investors seeking maximum total return, investing primarily in real estate securities with an emphasis on both income and capital appreciation
• Symbols: CSEIX, CSBIX, CSCIX, CSDIX
COHEN & STEERS
INTERNATIONAL REALTY FUND
• Designed for investors seeking total return, investing primarily in international real estate securities
• Symbols: IRFAX, IRFCX, IRFIX
COHEN & STEERS
ASIA PACIFIC REALTY SHARES
• Designed for investors seeking total return, investing primarily in real estate securities located in the Asia Pacific region
• Symbols: APFAX, APFCX, APFIX
COHEN & STEERS
GLOBAL INFRASTRUCTURE FUND
• Designed for investors seeking total return, investing primarily in global infrastructure securities
• Symbols: CSUAX, CSUBX, CSUCX, CSUIX
COHEN & STEERS
DIVIDEND VALUE FUND
• Designed for investors seeking high current income and long-term growth of income and capital appreciation, investing primarily in dividend paying common stocks and preferred stocks
• Symbols: DVFAX, DVFCX, DVFIX
Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. A prospectus containing this and other information can be obtained by calling 800-330-7348 or by visiting cohenandsteers.com. Please read the prospectus carefully before investing.
Cohen & Steers Securities, LLC, Distributor
31
COHEN & STEERS DIVIDEND VALUE FUND, INC.
OFFICERS AND DIRECTORS
Robert H. Steers
Director and co-chairman
Martin Cohen
Director and co-chairman
Bonnie Cohen
Director
George Grossman
Director
Richard E. Kroon
Director
Richard J. Norman
Director
Frank K. Ross
Director
Willard H. Smith Jr.
Director
C. Edward Ward, Jr.
Director
Adam M. Derechin
President and chief executive officer
Joseph M. Harvey
Vice president
Richard E. Helm
Vice president
Francis C. Poli
Secretary
James Giallanza
Treasurer and chief financial officer
Lisa D. Phelan
Chief compliance officer
KEY INFORMATION
Investment Advisor
Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, NY 10017
(212) 832-3232
Subadministrator and Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Transfer Agent
Boston Financial Data Services, Inc.
30 Dan Road
Canton, MA 02021
(800) 437-9912
Legal Counsel
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Distributor
Cohen & Steers Securities, LLC
280 Park Avenue
New York, NY 10017
Nasdaq Symbol: Class A—DVFAX
Class C—DVFCX
Class I—DVFIX
Web site: cohenandsteers.com
This report is authorized for delivery only to shareholders of Cohen & Steers Dividend Value Fund, Inc. unless accompanied or preceded by the delivery of a currently effective prospectus setting forth details of the Fund. Past performance is of course no guarantee of future results and your investment may be worth more or less at the time you sell.
32
COHEN & STEERS
DIVIDEND VALUE FUND
280 PARK AVENUE
NEW YORK, NY 10017
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SEMIANNUAL REPORT
AUGUST 31, 2009
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included in Item 1 above.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
None.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms
and that such material information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.
(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a- 2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COHEN & STEERS DIVIDEND VALUE FUND, INC.
By: | /s/ Adam M. Derechin | |
Name: Adam M. Derechin | |
Title: President and Chief Executive Officer | |
| |
Date: November 3, 2009 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Adam M. Derechin | |
Name: | Adam M. Derechin | |
Title: | President and Chief Executive Officer | |
| (principal executive officer) | |
| | | |
By: | /s/ James Giallanza | |
Name: | James Giallanza | |
Title: | Treasurer | |
| (principal financial officer) | |
| |
| |
Date: November 3, 2009 | |
| | | |