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)
757 Third Avenue, New York, NY 10017
(Address of principal executive offices) (Zip code)
Adam M. Derechin
Cohen & Steers Capital Management, Inc.
757 Third 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, 2005
Item 1. Reports to Stockholders.
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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Performance Summary
(period ended August 31, 2005) (unaudited)
Including Excluding
Sales Charge Sales Charge
------------ ------------
Cohen & Steers Dividend Value Fund, Inc. - Class A -3.75% 0.79%
Cohen & Steers Dividend Value Fund, Inc. - Class C -0.21% 0.79%
Cohen & Steers Dividend Value Fund, Inc. - Class I --- 0.79%
Russell 1000 Value Index(a) --- 1.13%
The performance data quoted represents 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 website 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.
Return figures for Class A shares are calculated without and with the effect of
the initial 4.50% maximum sales charge. Returns for Class C shares are
calculated without and with the effect of the 1% contingent deferred sales
charge charged only on redemptions made within one year of the date of purchase.
Class I shares are not subject to sales charges.
Through February 28, 2007, the fund's advisor has contractually agreed to waive
certain fees and/or reimburse the fund for expenses. Absent such arrangements,
returns would have been lower. The performance data quoted above does not
reflect the 1% redemption fee charged on certain Class A and Class I redemptions
and exchanges within six months of purchase. If such fee was included, returns
would have been lower.
(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.
Indexes are unmanaged and their returns do not include any sales charges or
fees. Such costs would lower performance. It is not possible to invest directly
in an index.
1
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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Expense Example
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 08/31/05.
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 the 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.
2
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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Beginning Ending Expenses Paid
Account Value Account Value During Period **
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8/31/2005* 8/31/2005* 08/31/05
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Class A
Actual (0.79% return) $1,000.00 $1,007.90 $0.04
Hypothetical (5% annual
return before expenses) $1,000.00 $1,000.10 $0.04
Class C
Actual (0.79% return) $1,000.00 $1,007.90 $0.06
Hypothetical (5% annual
return before expenses) $1,000.00 $1,000.08 $0.06
Class I
Actual (0.79% return) $1,000.00 $1,007.90 $0.03
Hypothetical (5% annual
return before expenses) $1,000.00 $1,000.11 $0.03
* Begininng account value as of the opening of business on 8/31/05; ending
account value as of the close of business on 8/31/05.
** Expenses are equal to the fund's Class A, Class C and Class I annualized
expense ratio of 1.50%, 2.15% and 1.15%, respectively, multiplied by the average
account value over the period, multiplied by 1/365 (to reflect the fiscal
period). If the fund had borne all of its expenses that were assumed by the
advisor, the annualized expense ratios would have been 19.05%, 19.70% and
18.70%, respectively.
3
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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AUGUST 31, 2005
Top Ten Holdings
(Unaudited)
Market % of
Security Value Net Assets
-------- ----- ----------
1. Wells Fargo & Co. $ 77,506 2.5%
2. Johnson & Johnson 63,390 2.0%
3. Edison International 63,042 2.0%
4. Northrop Grumman Corp. 61,699 2.0%
5. Citigroup 61,278 2.0%
6. Pfizer 61,128 2.0%
7. JPMorgan Chase & Co. 61,002 2.0%
8. GlobalSantaFe Corp. 60,944 2.0%
9. Wal-Mart de Mexico SA de CV (ADR) 60,760 1.9%
10. General Electric Co. 60,498 1.9%
Sector Breakdown
(Unaudited)
% of
Sector Net Assets
------ ----------
Financial 26.6%
Consumer - Non-Cyclical 13.5%
Consumer - Cyclical 11.6%
Industrial 10.9%
Energy 8.0%
Utility 5.0%
Real Estate 4.9%
Telecommunications 4.8%
Other 6.2%
Other Assets in Excess of Liabilities 8.5%
4
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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SCHEDULE OF INVESTMENTS
August 31, 2005 (Unaudited)
Number
of Shares Value
--------- -----
COMMON STOCK 91.5%
BASIC MATERIALS-CHEMICAL 1.9%
Alcoa................................................................ 1,100 $ 29,469
Dow Chemical Co...................................................... 700 30,240
-----------
59,709
-----------
COMMERCIAL SERVICES 1.4%
Paychex.............................................................. 1,300 44,369
-----------
CONSUMER-CYCLICAL 11.6%
APPAREL 1.5%
Nike................................................................. 600 47,346
-----------
AUTO MANUFACTURERS 0.9%
PACCAR............................................................... 400 28,032
-----------
AUTO PARTS EQUIPMENT 2.4%
Autoliv.............................................................. 1,000 44,500
Magna International.................................................. 400 29,384
-----------
73,884
-----------
HOME BUILDERS 1.1%
D.R. Horton.......................................................... 900 33,228
-----------
HOTEL 0.9%
Harrah's Entertainment............................................... 400 27,824
-----------
LEISURE TIME 0.9%
Carnival Corp........................................................ 600 29,604
-----------
RETAIL 2.9%
Nordstrom............................................................ 900 30,222
Wal-Mart de Mexico SA de CV (ADR).................................... 1,400 60,760
-----------
90,982
-----------
TOYS/GAMES/HOBBIES 1.0%
Mattel............................................................... 1,700 30,651
-----------
TOTAL CONSUMER-CYCLICAL ............................................. 361,551
-----------
See accompanying notes to financial statements.
5
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
August 31, 2005 (Unaudited)
Number
of Shares Value
--------- -----
CONSUMER-NON-CYCLICAL 13.5%
AGRICULTURE 1.9%
Altria Group......................................................... 400 $ 28,280
Monsanto Co.......................................................... 500 31,920
-----------
60,200
-----------
BEVERAGE 0.9%
Diageo PLC (ADR)..................................................... 500 28,855
-----------
COSMETICS/PERSONAL CARE 1.4%
Procter & Gamble Co.................................................. 800 44,384
-----------
HEALTHCARE PRODUCTS 4.0%
Becton Dickinson & Co................................................ 600 31,578
Johnson & Johnson.................................................... 1,000 63,390
Smith & Nephew PLC (ADR)............................................. 600 29,220
-----------
124,188
-----------
HEALTHCARE SERVICES 1.4%
HCA.................................................................. 900 44,370
-----------
PHARMACEUTICAL 3.9%
Abbott Laboratories.................................................. 1,300 58,669
Pfizer............................................................... 2,400 61,128
-----------
119,797
-----------
TOTAL CONSUMER-NON-CYCLICAL ......................................... 421,794
-----------
ENERGY 8.0%
OIL & GAS 6.5%
BP PLC (ADR)......................................................... 700 47,866
ChevronTexaco Corp................................................... 500 30,700
ConocoPhillips....................................................... 500 32,970
GlobalSantaFe Corp................................................... 1,300 60,944
Valero Energy Corp................................................... 300 31,950
-----------
204,430
-----------
See accompanying notes to financial statements.
6
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
August 31, 2005 (Unaudited)
Number
of Shares Value
--------- -----
OIL & GAS SERVICES 1.5%
Baker Hughes......................................................... 800 $ 47,000
-----------
TOTAL ENERGY ........................................................ 251,430
-----------
FINANCIAL 26.6%
BANK 8.7%
Bank of America Corp................................................. 1,400 60,242
North Fork Bancorporation............................................ 2,200 60,478
TCF Financial Corp................................................... 1,100 31,141
US Bancorp........................................................... 1,500 43,830
Wells Fargo & Co..................................................... 1,300 77,506
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273,197
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DIVERSIFIED FINANCIAL SERVICE 8.4%
Citigroup............................................................ 1,400 61,278
Countrywide Financial Corp........................................... 900 30,411
Franklin Resources................................................... 600 48,264
Freddie Mac.......................................................... 500 30,190
JPMorgan Chase & Co.................................................. 1,800 61,002
Morgan Stanley....................................................... 600 30,522
-----------
261,667
-----------
INSURANCE 9.5%
ACE Ltd.............................................................. 1,300 57,733
Aflac................................................................. 700 30,254
Allstate Corp........................................................ 800 44,968
American International Group......................................... 300 17,760
Fidelity National Financial.......................................... 800 31,296
HCC Insurance Holdings............................................... 2,200 58,630
XL Capital Ltd....................................................... 800 55,600
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296,241
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TOTAL FINANCIAL ..................................................... 831,105
-----------
See accompanying notes to financial statements.
7
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
August 31, 2005 (Unaudited)
Number
of Shares Value
--------- -----
INDUSTRIAL 10.9%
AEROSPACE & DEFENSE 3.1%
General Dynamics Corp................................................ 300 $ 34,377
Northrop Grumman Corp................................................ 1,100 61,699
-----------
96,076
-----------
BUILDING MATERIALS 1.1%
Cemex SA de CV (ADR)................................................. 700 33,369
-----------
COMPUTERS 2.0%
Hewlett-Packard Co................................................... 1,100 30,536
International Business Machines Corp................................. 400 32,248
-----------
62,784
-----------
DIVERSIFIED MANUFACTURING 1.9%
General Electric Co.................................................. 1,800 60,498
-----------
ENVIRONMENTAL CONTROL 1.4%
Waste Management..................................................... 1,600 43,888
-----------
TRANSPORTATION 1.4%
United Parcel Service................................................ 600 42,534
-----------
TOTAL INDUSTRIAL 339,149
-----------
REAL ESTATE 4.9%
APARTMENT 1.1%
AvalonBay Communities................................................ 400 33,616
-----------
HOTEL 0.9%
Starwood Hotels & Resorts Worldwide.................................. 500 29,150
-----------
INDUSTRIAL 1.0%
ProLogis............................................................. 700 30,457
-----------
OFFICE 0.9%
Boston Properties.................................................... 400 28,460
-----------
REGIONAL MALL 1.0%
Simon Property Group................................................. 400 30,428
-----------
TOTAL REAL ESTATE ................................................... 152,111
-----------
See accompanying notes to financial statements.
8
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
August 31, 2005 (Unaudited)
Number
of Shares Value
--------- -----
TECHNOLOGY-SEMICONDUCTORS 2.9%
Intel Corp........................................................... 1,700 $ 43,724
Microchip Technology................................................. 1,500 46,680
-----------
90,404
-----------
TELECOMMUNICATIONS 4.8%
Harris Corp.......................................................... 800 30,888
Nokia Corp. (ADR).................................................... 1,900 29,963
Verizon Communications............................................... 900 29,439
Vodafone Group PLC (ADR)............................................. 2,200 59,950
-----------
150,240
-----------
UTILITY 5.0%
ELECTRIC - DISTRIBUTION 2.0%
Edison International................................................. 1,400 63,042
-----------
ELECTRIC - INTEGRATED 3.0%
Exelon Corp.......................................................... 600 32,334
FPL Group............................................................ 1,400 60,326
-----------
92,660
-----------
TOTAL UTILITY ....................................................... 155,702
-----------
TOTAL INVESTMENTS (Identified cost-$2,834,238)................. 91.5% 2,857,564
OTHER ASSETS IN EXCESS OF LIABILITIES.......................... 8.5% 266,034
---------- --------------
NET ASSETS..................................................... 100.0% $ 3,123,598
========== ==============
Note: Percentages indicated are based on the net assets of the fund.
ADR American Depositary Receipt
See accompanying notes to financial statements.
9
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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STATEMENT OF ASSETS AND LIABILITIES
August 31, 2005 (Unaudited)
ASSETS:
Investments in securities at value (Identified cost - $2,834,238) ............................ $ 2,857,564
Cash ......................................................................................... 100,275
Receivable for fund shares sold .............................................................. 3,000,000
Deferred offering costs ...................................................................... 194,466
Receivable due from advisor .................................................................. 1,633
-----------
Total Assets .......................................................................... 6,153,938
-----------
LIABILITIES:
Payable for investment securities purchased .................................................. 2,834,238
Payable for offering costs ................................................................... 195,000
Payable to administrator ..................................................................... 225
Payable for directors fees ................................................................... 148
Payable to investment advisor ................................................................ 2
Other liabilities ............................................................................ 727
-----------
Total Liabilities ..................................................................... 3,030,340
-----------
NET ASSETS ........................................................................................ $ 3,123,598
===========
NET ASSETS consist of:
Paid-in capital .............................................................................. $ 3,100,275
Net investment loss .......................................................................... (3)
Net unrealized appreciation on investments ................................................... 23,326
-----------
$ 3,123,598
===========
CLASS A SHARES:
NET ASSETS .............................................................. $ 1,155
Shares issued and outstanding ($0.001 par value common stock outstanding) 100
-----------
Net asset value and redemption price per share .......................... $ 11.55
===========
Maximum offering price per share ($11.55 [div] 0.955)(a) ................ $ 12.09
===========
CLASS C SHARES:
NET ASSETS .............................................................. $ 1,155
Shares issued and outstanding ($0.001 par value common stock outstanding) 100
-----------
Net asset value and offering price per share(b) ......................... $ 11.55
===========
CLASS I SHARES:
NET ASSETS .............................................................. $ 3,121,288
Shares issued and outstanding ($0.001 par value common stock outstanding) 270,330
-----------
Net asset value, offering and redemption price per share ................ $ 11.55
===========
----------------
(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 which varies with the length of time
shares are held.
See accompanying notes to financial statements
10
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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STATEMENT OF OPERATIONS
For August 31, 2005(a) (Unaudited)
Expenses:
Offering costs ............................................................................... $ 534
Professional fees ............................................................................ 393
Administration fees .......................................................................... 225
Directors' fees and expenses ................................................................. 148
Shareholder reporting expenses ............................................................... 137
Custodian fees and expenses .................................................................. 76
Transfer agent fees .......................................................................... 61
Registration and filing fees ................................................................. 44
Investment advisory fees ..................................................................... 2
Miscellaneous ................................................................................ 16
-----------
Total Expenses ........................................................................... 1,636
Reduction of Expenses ........................................................................ (1,633)
-----------
Net Expenses ............................................................................. 3
-----------
Net Investment Loss ............................................................................... (3)
-----------
Net change in unrealized appreciation on investments .............................................. 23,326
-----------
Net Increase in Net Assets Resulting from Operations .............................................. $ 23,323
===========
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(a) Commencement of operations
See accompanying notes to financial statements
11
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
For
August 31, 2005(a)
--------------------
Change in Net Assets:
From Operations:
Net investment loss ........................................................................... $ (3)
Net change in unrealized appreciation on investments .......................................... 23,326
--------------------
Net increase in net assets resulting from operations ........................................ 23,323
--------------------
Capital Stock Transactions:
Increase in net assets from fund share transactions ............................................. 3,000,000
--------------------
Total increase in net assets .................................................................. 3,023,323
Net Assets:
Beginning of period ............................................................................. 100,275
--------------------
End of period(b) ................................................................................ $ 3,123,598
====================
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(a) Commencement of operations.
(b) Includes a net investment loss of $3.
See accompanying notes to financial statements
12
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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FINANCIAL HIGHLIGHTS (Unaudited)
The following table includes selected data for a share outstanding
throughout the period and other performance information derived from the
financial statements. It should be read in conjunction with the financial
statements and notes thereto.
For August 31, 2005(a)
--------------------------------------------------------
Per Share Operating Performance: Class A Class C Class I
- -------------------------------- ---------------- ---------------- ----------------
Net asset value, beginning of period ..................... $ 11.46 $ 11.46 $ 11.46
---------------- ---------------- ----------------
Income from investment operations:
Net investment loss(b) .......................... 0.00 0.00 0.00
Net unrealized gain on investments .............. 0.09 0.09 0.09
---------------- ---------------- ----------------
Total income from investment operations ......... 0.09 0.09 0.09
---------------- ---------------- ----------------
Net increase in net asset value ................. 0.09 0.09 0.09
---------------- ---------------- ----------------
Net asset value, end of period ........................... $ 11.55 $ 11.55 $ 11.55
================ ================ ================
============================================================================= ================ ================
Total investment return(c) ............................... 0.79% 0.79% 0.79%
============================================================================= ================ ================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) ................. $ 1.2 $ 1.2 $ 3,100.0
================ ================ ================
Ratio of expenses to average daily net assets
(before expense reduction)(d,e) ................. 19.05% 19.70% 18.70%
================ ================ ================
Ratio of expenses to average daily net assets
(net of expense reduction)(d,e) ................. 1.50% 2.15% 1.15%
================ ================ ================
Ratio of net investment income to average daily net assets
(before expense reduction)(d,e) ................. -19.05% -19.70% -18.70%
================ ================ ================
Ratio of net investment income to average daily net assets
(net of expense reduction)(d,e) ................. -1.50% -2.15% -1.15%
================ ================ ================
Portfolio turnover rate(c) ............................... 0% 0% 0%
================ ================ ================
- ---------
(a) Commencement of operations.
(b) Amount is less than $0.005.
(c) Not annualized.
(d) Annualized.
(e) Reflects overall fund ratios for investment income and non-class
specific expenses. Average daily net assets do not include a
$3,000,000 subscription reflected in the financial statements, but not
recorded on the fund's books until the next business day.
See accompanying notes to financial statements
13
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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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 objectives are to
provide a relatively high level of current income and long term growth of income
and capital appreciation. The fund had no operations until July 22, 2005 when it
sold 100 shares each of Class A, C, and 8,550 shares of Class I for $100,275 to
Cohen & Steers Capital Management, Inc. (the advisor). Investment operations
commenced on August 31, 2005. 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.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the advisor to
be over-the-counter, but excluding securities admitted to trading on the Nasdaq
National List, are valued at the official closing prices as reported by Nasdaq,
the National Quotation Bureau, or such other comparable 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. Where securities are traded on more than one exchange and also
over-the-counter, the securities will generally be valued using the quotations
the Board of Directors believes most closely reflect the value of such
securities.
Securities for which market prices are unavailable will be valued at fair
value pursuant to procedures approved by 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
14
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
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 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.
To the extent the fund holds securities that are primarily listed on
foreign exchanges that trade on weekends or days when the fund does not price
its shares, the value of the securities held in the fund may change on days when
you will not be able to purchase or redeem fund shares.
Short-term debt securities, which have a maturity date of 60 days or
less, are valued at amortized cost, which approximates value.
Security Transactions and Investment Income: 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. Dividend income is recorded on the ex-dividend date. The fund
records distributions received in excess of income from underlying investments
as a reduction of cost of investments and/or realized gain. Such amounts are
based on estimates if actual amounts are not available, and actual amounts of
income, realized gain and return of capital may differ from the estimated
amounts. The fund adjusts the estimated amounts of the components of
distributions (and consequently its net investment income) as an increase to
unrealized appreciation/ (depreciation) and realized gain/(loss) on investments
as necessary once the issuers provide information about the actual composition
of the distributions. 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.
Dividends and Distributions to Shareholders: Dividends from net
investment income are declared and paid quarterly. 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 ex-dividend date unless the
shareholder has elected to have them paid in cash.
A portion of the fund's dividends may consist of amounts in excess of net
investment income derived from nontaxable components of the dividends from the
fund's portfolio investments. Net realized capital gains, unless offset by any
available capital loss carryforward, are distributed to shareholders annually.
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.
Federal Income Taxes: It is the policy of the fund to qualify as a
regulated investment company, if such qualification is in the best interest of
the shareholders, by complying with the requirements of
15
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
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.
Note 2. Investment Advisory and Administration Fees and Other Transactions with
Affiliates
Investment Advisory Fees: Pursuant to an investment advisory agreement
(the advisory agreement) with the fund, 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 up to and including $1.5
billion and 0.70% of the average daily net asset above $1.5 billion.
For August 31, 2005 (commencement of operations) and through February 28,
2007, 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 1.50% for Class A shares, 2.15% for Class C shares and
1.15% for Class I shares.
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.
Distribution Fees: Cohen & Steers Securities, LLC (the distributor), an
affiliated entity of the advisor, distributes the shares of the fund. The fund
has adopted a distribution plan (the plan) pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Under the plan, the fund may not incur
distribution fees which exceed an annual rate of 0.25% of the average daily net
assets attributable to the Class A shares and 0.75% of the average daily net
assets attributable to the Class C shares.
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 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' Fees: Certain directors and officers of the fund are also
directors, officers, and/or employees of the advisor. None of the directors and
officers so affiliated received compensation from the fund for their services.
16
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
Note 3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, for
August 31, 2005 totaled $2,834,238 and $0, respectively.
Note 4. Income Tax Information
At August 31, 2005 the cost of investments and net unrealized
appreciation for federal income tax purposes were as follows:
Aggregate cost..................................................... $ 2,834,238
===================
Gross unrealized appreciation...................................... $ 24,357
Gross unrealized depreciation...................................... (1,031)
-------------------
Net unrealized appreciation ....................................... $ 23,326
===================
17
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
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. At August 31, 2005, the advisor owned all of the fund's
outstanding shares. Transactions in fund shares were as follows:
For
August 31, 2005(a)
-----------------------------------
Shares Amount
--------------- ------------------
CLASS A:
Sold................................... 0 $ 0
============ ============
CLASS C:
Sold.................................. 0 $ 0
============ ============
CLASS I:
Sold.................................. 261,780 $ 3,000,000
============ ============
- --------------
(a) Commencement of operations
18
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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 1-800-330-7348, (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, beginning in August 2006, the fund's proxy
voting record for the most recent 12-month period ended June 30 will be
available (i) without charge, upon request, by calling 1-800-330-7348 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
1-800-330-7348, 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 1-800-SEC-0330.
Please note that the distributions paid by the fund to shareholders are
subject to recharacterization for tax purposes. The final tax treatment of these
distributions is reported to shareholders on their 1099-DIV forms, which are
mailed to shareholders after the close of each fiscal year. The fund may 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. To the extent this occurs, the fund's shareholders of record will be
notified of the estimated amount of capital returned to shareholders for each
such distribution and this information will also be available at
cohenandsteers.com. Distributions of capital decrease the fund's total assets
and, therefore, could have the effect of increasing the fund's expense ratio. In
addition, in order to make these distributions, the fund may have to sell
portfolio securities at a less than opportune time.
19
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COHEN & STEERS DIVIDEND VALUE FUND, INC.
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers Investment Advisor
Director and co-chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and co-chairman (212) 832-3232
Bonnie Cohen Subadministrator and Custodian
Director State Street Bank and Trust Company
225 Franklin Street
George Grossman Boston, MA 02110
Director
Transfer Agent
Richard E. Kroon Boston Financial Data Services, Inc.
Director 66 Brooks Drive
Braintree, MA 02184
Richard J. Norman (800) 437-9912
Director
Legal Counsel
Frank K. Ross Simpson Thacher & Bartlett LLP
Director 425 Lexington Avenue
New York, NY 10017
Willard H. Smith Jr.
Director Distributor
Cohen & Steers Securities, LLC
C. Edward Ward, Jr. 757 Third Avenue
Director New York, NY 10017
Adam M. Derechin Nasdaq Symbol: Class A-DVFAX
President and chief executive officer Class C-DVFCX
Class I-DVFIX
Joseph M. Harvey
Vice president Web site: cohenandsteers.com
Richard E. Helm This report is authorized for delivery only to
Vice president shareholders of Cohen & Steers Dividend Value
Fund, Inc. unless accompanied or preceded by the
Lawrence B. Stoller delivery of a currently effective prospectus
Secretary setting forth details of the fund. Past
performance is of course no guarantee of future
Jay J. Chen results and your investment may be worth more or
Treasurer less at the time you sell.
John E. McLean
Chief compliance officer and assistant secretary
20
COHEN & STEERS
--------------
DIVIDEND VALUE FUND
SEMIANNUAL REPORT
AUGUST 31, 2005
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 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.
The board of directors of the registrant has adopted a Nominating Committee
Charter which provides that the Nominating Committee (the "Committee") will
consider and evaluate nominee candidates properly submitted by shareholders on
the same basis as it considers and evaluates candidates recommended by other
sources. The shareholder must submit any such recommendation in writing to the
registrant, to the attention of the Secretary, at the address of the principal
executive offices of the registrant. A copy of the qualifications and procedures
that
must be met or followed by shareholders to properly submit a nominee candidate
to the Committee may be obtained by submitting a request in writing to the
Secretary of the registrant.
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 has materially affected, or is 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: October 26, 2005
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/ Jay J. Chen
----------------------------------------
Name: Jay J. Chen
Title: Treasurer
(principal financial officer)
Date: October 26, 2005
Statement of Differences
The Section symbol shall be expressed as.............................. 'SS'
The division sign shall be expressed as .............................. [div]