w March 26, 2021 Joseph E. Buffa, Equity Sector Analyst Jack Russo, CFA, Equity Sector Analyst Advice & Research Diversified Stock Income Plan List Investment Rationales Diversified Stock Income Plan Overview The DSIP List (Diversified Stock Income Plan List) focuses on companies that we believe will provide consistent annual dividend growth over a long-term investment horizon. Our objective is to provide a broad list of high quality, industry leading companies from which an investor can assemble a well-diversified portfolio. Through consistent dividend growth, our goal is to help investors stay ahead of the wealth eroding effects of inflation. The DSIP List is a varied bunch. Our recommendations span each of the market sectors, range in market capitalization from about $3 billion to over $1 trillion, yield anywhere from below 1% to over 7%, and sell everything from lumber to electricity to pharmaceuticals. This is, of course, by design – remember the “D” in DSIP stands for Diversified. The rationale for recommending any one of them is similarly diverse – some have lots of stuff going on, some not so much; some look very compelling from a valuation perspective, some less so; some grow quickly, others slowly. The unifying theme that encompasses each and every one of the names on the list, however, is that we believe each can provide a reliable, steadily- growing stream of dividend income over a long-term investment horizon. Over time, we believe the company’s value will reflect the growth of the dividends it generates for its owners. All financial data as of March 25, 2021 and sourced from FactSet and Wells Fargo Advisors. Please see pages 49-51 of this report for Important Disclosures, Disclaimers and Analyst Certifications DSIP List – Investment Rationales March 26, 2021 Financials ............................................................. 14 Table of Contents Communication Services ..................................... 4 Aflac Incorporated (AFL) ...................................... 14 Comcast Corporation Class A (CMCSA) ............. 4 BlackRock, Inc. (BLK) ............................................. 15 Verizon Communications Inc. (VZ) ...................... 4 Brown & Brown, Inc. (BRO) .................................. 16 Consumer Discretionary ...................................... 5 Chubb Limited (CB) ............................................... 16 Home Depot, Inc. (HD) ............................................ 5 Commerce Bancshares, Inc. (CBSH).................. 17 Lowe's Companies, Inc. (LOW) .............................. 6 FactSet Research Systems Inc. (FDS)............... 17 McDonald's Corporation (MCD) ........................... 6 Intercontinental Exchange, Inc. (ICE) ............... 18 NIKE, Inc. Class B (NKE) .......................................... 7 S&P Global, Inc. (SPGI) .......................................... 18 Starbucks Corporation (SBUX) ............................. 7 T. Rowe Price Group, Inc. (TROW) ..................... 19 V.F. Corporation (VFC) ............................................ 8 Health Care .......................................................... 20 Consumer Staples................................................. 8 Abbott Laboratories (ABT) .................................. 20 Brown-Forman Corporation Class B (BF.B) ...... 8 AmerisourceBergen Corporation (ABC) .......... 20 Church & Dwight Co., Inc. (CHD) .......................... 9 Amgen Inc. (AMGN) ............................................... 21 Clorox Company (CLX) ............................................ 9 Becton, Dickinson and Company (BDX) ........... 22 Colgate-Palmolive Company (CL)......................10 Johnson & Johnson (JNJ) ..................................... 22 Costco Wholesale Corporation (COST) ............10 Medtronic Plc (MDT) ............................................. 23 J.M. Smucker Company (SJM) ............................11 Stryker Corporation (SYK) ................................... 23 McCormick & Company, Incorporated (MKC)11 UnitedHealth Group Incorporated (UNH) ....... 24 Mondelez International, Inc. Class A (MDLZ)..12 Industrials............................................................ 24 PepsiCo, Inc. (PEP) .................................................12 3M Company (MMM) ........................................... 24 Procter & Gamble Company (PG) ......................13 Emerson Electric Co. (EMR) ................................ 25 Walmart Inc. (WMT) ..............................................13 General Dynamics Corporation (GD) ................ 25 Energy .................................................................. 14 Honeywell International Inc. (HON) .................. 26 Phillips 66 (PSX) ......................................................14 Illinois Tool Works Inc. (ITW)............................... 26 L3Harris Technologies Inc (LHX).......................... 27 Lockheed Martin Corporation (LMT)................ 27 Raytheon Technologies Corporation (RTX) .... 28 Union Pacific Corporation (UNP) ....................... 29 United Parcel Service, Inc. Class B (UPS) ......... 29 W.W. Grainger, Inc. (GWW) ................................. 30 Xylem Inc. (XYL) ...................................................... 31 Page 2 of 51 DSIP List – Investment Rationales March 26, 2021 Information Technology .................................... 31 Materials.............................................................. 38 Accenture Plc Class A (ACN) ................................31 Air Products & Chemicals, Inc. (APD) ................ 38 Analog Devices, Inc. (ADI) ....................................32 Ecolab Inc. (ECL) ..................................................... 39 Apple Inc. (AAPL) ....................................................33 Linde plc (LIN).......................................................... 39 Automatic Data Processing, Inc. (ADP) ............33 PPG Industries, Inc. (PPG) .................................... 40 Broadridge Financial Solutions, Inc. (BR) .........34 The Sherwin-Williams Co. (SHW) ...................... 40 Cisco Systems, Inc. (CSCO) ..................................34 Real Estate .......................................................... 41 International Business Machines Corporation American Tower Corporation (AMT) ................ 41 (IBM)...........................................................................35 Crown Castle International Corp (CCI) ............. 42 Jack Henry & Associates, Inc. (JKHY) ................36 Federal Realty Investment Trust (FRT) ........... 42 Microsoft Corporation (MSFT) ...........................36 Realty Income Corporation (O) .......................... 43 Paychex, Inc. (PAYX) ..............................................37 Utilities ................................................................ 44 Texas Instruments Incorporated (TXN) ...........37 American Water Works Company, Inc. (AWK) ..................................................................................... 44 Atmos Energy Corporation (ATO)..................... 44 CMS Energy Corporation (CMS) ........................ 45 Eversource Energy (ES) ........................................ 46 New Jersey Resources Corporation (NJR)....... 46 NextEra Energy, Inc. (NEE) .................................. 47 WEC Energy Group Inc (WEC) ............................ 47 Xcel Energy Inc. (XEL)............................................ 48 Page 3 of 51 DSIP List – Investment Rationales March 26, 2021 Communication Services Comcast Corporation Class A (CMCSA) Price $56.30 Consensus NTM EPS Estimate $2.82 Dividend Per Share (DPS) $1.00 Consensus Long-Term Growth Estimate 14% DPS Yield 1.8% NTM PE 19.8x DPS Growth Estimate 9% NTM PE 5-yr Average 15.8x DPS Growth History 13 years S&P Credit Rating A- DPS 5-yr Historical Annual Growth 13% Net Debt/Capital 50% Comcast is the leading U.S. cable TV and wireline internet access provider, with a physical network passing over 57 million homes and businesses. In addition to its vast cable TV and internet distribution assets, Comcast also owns NBCUniversal (NBCU), a premier media company, and distribution and content assets in Europe. Comcast is the leader in cable video and high speed data distribution with more than 50% share in markets served. The company’s video, internet access, and voice networks span eight of the ten largest markets in the country, a critical competitive advantage giving Comcast the size and scale to compete effectively as content consumption patterns evolve. Given vertical integration of content created at NBCU combined with scale in both high speed internet and cable, we believe Comcast is well positioned in the evolving media and entertainment ecosystem. Key Risks: The markets Comcast serves are very competitive and each faces distinct challenges including regulation, technology advances that may displace cable TV (OTT), and cost and pricing pressures (content creation/rights, ad rates). Through ownership of essentially all the super-voting Class B stock, Comcast is controlled by Brian Roberts, the company's chairman and CEO, and his family. In addition to representing 33% of the voting power, Class B stock also grants the Roberts family the right to reject certain proposals, even if approved by the Board of Directors and Class A shareholders. Verizon Communications Inc. (VZ) Price $57.38 Consensus NTM EPS Estimate $5.07 Dividend Per Share (DPS) $2.51 Consensus Long-Term Growth Estimate 3% DPS Yield 4.4% NTM PE 11.4x DPS Growth Estimate 2% NTM PE 5-yr Average