<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC. TWO WORLD TRADE CENTER, NEW YORK,
NEW YORK 10048
LETTER TO THE SHAREHOLDERS
DEAR SHAREHOLDER:
During the six months ended August 31, 1995, interest rates declined, inflation
remained benign, corporate profits continued to increase, growth overseas slowed
and the dollar improved relative to other major currencies. All of these factors
combined to provide the backdrop for common stock prices to advance. The U.S.
stock market, as measured by the Standard & Poor's 500 Composite Stock Price
Index (S&P 500), recorded a total return of 16.79 percent for the six-month
period ended August 31, 1995. For the same period, Dean Witter Dividend Growth
Securities posted a total return of 13.90 percent.
The Fund's underperformance relative to the S&P 500 Index over this period is
largely due to the exceptional strength in small-capitalization stocks late in
the period, in particular technology. The Fund, which seeks to provide
reasonable current income and long-term growth of income and capital, has little
exposure to the technology sector, because it affords little or no current
yield.
PORTFOLIO ACTIVITY
The Fund utilizes a stringent filtering process to monitor the progress of
current investments, as well as to select additional securities. Through the use
of this process, the Fund places an emphasis on high quality, dividend paying
stocks which appear to be undervalued.
On August 31, 1995, the portfolio included 71 equity issues spread among 33
different industries. During the period under review, three portfolio holdings
were sold: Petrie Stores and Toys R Us (a spin-off from Petrie) due to valuation
considerations, and Woolworth because of the elimination of its dividend. One
new portfolio position was initiated with the purchase of shares of
Dayton-Hudson, a major retailer. Among the Fund's largest holdings as of August
31, 1995 were Aluminum Co. of America, International Business Machines, Sprint
Corp., Coca-Cola Co. and Schering-Plough.
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
LETTER TO THE SHAREHOLDERS, CONTINUED
LOOKING AHEAD
Going forward, our long-term outlook for both the economy and the securities
markets in general are favorable. In addition, given the current low
inflation/low interest rate environment, we remain strongly convinced that the
common stocks of well-established companies will perform relatively well in the
months ahead. Consequently, we remain confident, patient and relatively fully
invested.
We appreciate your support of Dean Witter Dividend Growth Securities and look
forward to continuing to serve your investment needs in the future.
Very truly yours,
[LOGO]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (86.2%)
AEROSPACE (4.4%)
1,800,000 Lockheed Martin Corp............. $ 109,575,000
1,500,000 Raytheon Co...................... 121,312,500
1,550,000 United Technologies Corp......... 129,231,250
-----------------
360,118,750
-----------------
ALUMINUM (2.7%)
2,250,000 Alcan Aluminum Ltd. (Canada)..... 73,406,250
2,670,000 Aluminum Co. of America.......... 152,523,750
-----------------
225,930,000
-----------------
APPAREL (0.7%)
1,000,000 V.F. Corp........................ 54,750,000
-----------------
AUTO PARTS (1.0%)
1,100,000 TRW, Inc......................... 85,662,500
-----------------
AUTOMOTIVE (2.7%)
3,800,000 Ford Motor Co.................... 116,375,000
2,300,000 General Motors Corp.............. 108,100,000
-----------------
224,475,000
-----------------
BANKS (5.1%)
2,050,000 BankAmerica Corp................. 115,825,000
2,400,000 KeyCorp.......................... 74,400,000
1,500,000 Morgan (J.P.) & Co., Inc......... 109,312,500
1,900,000 NationsBank Corp................. 116,612,500
-----------------
416,150,000
-----------------
BEVERAGES - SOFT DRINKS (3.1%)
2,150,000 Coca Cola Co..................... 138,137,500
2,500,000 PepsiCo, Inc..................... 113,125,000
-----------------
251,262,500
-----------------
CHEMICALS (6.0%)
1,575,000 Dow Chemical Co.................. 116,550,000
1,950,000 Du Pont (E.I.) de Nemours &
Co............................... 127,481,250
350,000 Eastman Chemical Company......... 22,618,741
1,425,000 Grace (W.R.) & Co................ 94,940,625
1,425,000 Monsanto Co...................... 135,196,875
-----------------
496,787,491
-----------------
COAL (0.3%)
500,000 MAPCO, Inc....................... 26,687,500
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMPUTERS (3.0%)
2,250,000 Honeywell, Inc................... $ 98,437,500
1,475,000 International Business Machines
Corp............................. 152,478,125
-----------------
250,915,625
-----------------
CONGLOMERATES (2.6%)
1,925,000 Minnesota Mining & Manufacturing
Co............................... 105,153,125
2,200,000 Tenneco, Inc..................... 106,700,000
-----------------
211,853,125
-----------------
COSMETICS (3.6%)
1,400,000 Avon Products, Inc............... 98,875,000
3,000,000 Gillette Co...................... 125,250,000
1,592,500 International Flavors &
Fragrances Inc................... 76,240,938
-----------------
300,365,938
-----------------
DRUGS (7.6%)
3,300,000 Abbott Laboratories.............. 127,875,000
1,600,000 American Home Products Corp...... 123,200,000
1,675,000 Bristol-Myers Squibb Co.......... 114,946,875
2,900,000 Schering-Plough Corp............. 135,212,500
2,800,000 SmithKline Beecham PLC (ADR)
(United Kingdom)................. 125,300,000
-----------------
626,534,375
-----------------
ELECTRIC - MAJOR (2.2%)
1,900,000 General Electric Co.............. 111,862,500
5,000,000 Westinghouse Electric Corp....... 68,125,000
-----------------
179,987,500
-----------------
FINANCE (1.5%)
1,000,000 Beneficial Corp.................. 49,125,000
1,360,000 Household International, Inc..... 76,330,000
-----------------
125,455,000
-----------------
FOODS (1.0%)
2,450,000 Quaker Oats Company (The)........ 85,137,500
-----------------
HOUSEHOLD APPLIANCES (0.9%)
1,400,000 Whirlpool Corp................... 76,300,000
-----------------
INSURANCE (1.4%)
1,675,000 Aetna Life & Casualty Co......... 114,318,750
-----------------
MACHINERY - AGRICULTURAL (1.5%)
1,400,000 Deere & Co....................... 119,700,000
-----------------
METALS & MINING (1.2%)
1,500,000 Phelps Dodge Corp................ 95,062,500
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
NATURAL GAS (2.9%)
1,250,000 Burlington Resources, Inc........ $ 50,781,250
650,000 El Paso Natural Gas Co........... 18,281,250
3,050,000 Enron Corp....................... 102,556,250
1,800,000 NorAm Energy Corp................ 12,825,000
2,200,000 Panhandle Eastern Corp........... 55,000,000
-----------------
239,443,750
-----------------
OFFICE EQUIPMENT (2.7%)
2,400,000 Pitney Bowes, Inc................ 97,500,000
1,025,000 Xerox Corp....................... 123,768,750
-----------------
221,268,750
-----------------
OIL - DOMESTIC (2.7%)
1,750,000 Amoco Corp....................... 111,562,500
1,000,000 Atlantic Richfield Co............ 109,125,000
-----------------
220,687,500
-----------------
OIL INTEGRATED - INTERNATIONAL (4.3%)
1,675,000 Exxon Corp....................... 115,156,250
1,300,000 Mobil Corp....................... 123,825,000
975,000 Royal Dutch Petroleum Co. (ADR)
(Netherlands).................... 116,268,750
-----------------
355,250,000
-----------------
PAPER & FOREST PRODUCTS (1.2%)
2,200,000 Weyerhaeuser Co.................. 101,200,000
-----------------
PHOTOGRAPHY (1.5%)
2,175,000 Eastman Kodak Co................. 125,334,375
-----------------
RAILROADS (4.0%)
1,575,000 Burlington Northern, Inc......... 109,068,750
1,700,000 Conrail, Inc..................... 114,325,000
1,250,000 CSX Corp......................... 103,125,000
-----------------
326,518,750
-----------------
RETAIL (1.4%)
1,350,000 Dayton-Hudson Corp............... 98,718,750
1,500,000 KMart Corp....................... 20,437,500
-----------------
119,156,250
-----------------
RETAIL - DEPARTMENT STORES (1.3%)
2,500,000 May Department Stores Co......... 105,937,500
-----------------
SOAP & HOUSEHOLD PRODUCTS (1.6%)
1,850,000 Procter & Gamble Co.............. 128,343,750
-----------------
TELECOMMUNICATIONS (1.3%)
2,450,000 U.S. West, Inc................... 106,575,000
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
TELEPHONES (4.3%)
1,750,000 Bell Atlantic Corp............... $ 104,562,500
3,000,000 GTE Corp......................... 109,875,000
3,980,000 Sprint Corp...................... 141,290,000
-----------------
355,727,500
-----------------
UTILITIES - ELECTRIC (4.5%)
2,400,000 FPL Group, Inc................... 93,300,000
2,250,000 Houston Industries, Inc.......... 95,343,750
3,200,000 Pacific Gas & Electric Co........ 92,000,000
3,300,000 Unicom Corp...................... 92,812,500
-----------------
373,456,250
-----------------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$4,442,921,133).................. 7,106,353,429
-----------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (10.9%)
$ 50,000 U.S. Treasury Bond 8.125% due
08/15/19......................... 57,835,938
90,000 U.S. Treasury Bond 8.00% due
11/15/21......................... 103,317,188
50,000 U.S. Treasury Bond 7.125% due
02/15/23......................... 52,257,812
400,000 U.S. Treasury Bond 6.25% due
08/15/23......................... 374,687,500
250,000 U.S. Treasury Note 4.00% due
01/31/96......................... 248,320,312
30,000 U.S. Treasury Note 8.875% due
02/15/96......................... 30,421,875
25,000 U.S. Treasury Note 8.00% due
05/15/01......................... 27,230,469
-----------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $875,789,406)... 894,071,094
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.5%)
COMMERCIAL PAPER (a) (2.4%)
AUTOMOTIVE FINANCE (0.7%)
$ 60,000 Ford Motor Credit Co. 5.73% to
5.75% due 09/06/95 to 09/11/95... $ 59,932,312
-----------------
BANKS - COMMERCIAL (0.5%)
40,000 UBS Finance (Del.) Inc. 5.74% due
09/22/95 to 09/25/95............. 39,856,500
-----------------
FINANCE - DIVERSIFIED (0.6%)
50,000 General Electric Capital Corp.
5.80% due 09/01/95............... 50,000,000
-----------------
OFFICE EQUIPMENT & SUPPLIES (0.6%)
48,000 IBM Credit Corp. 5.73% due
09/19/95 to 09/26/95............. 47,829,055
-----------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $197,617,867).... 197,617,867
-----------------
U.S. GOVERNMENT AGENCY (a) (0.1%)
7,925 Federal Home Loan Banks 5.70% due
09/01/95 (Amortized Cost
$7,925,000)...................... 7,925,000
-----------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.0%)
$ 1,306 The Bank of New York 5.8125% due
09/01/95 (dated 08/31/95;
proceeds $1,306,377;
collateralized by $1,613,611
Federal Mortgage Acceptance Corp.
6.337% due 08/25/23 valued at
$1,371,866) (Identified Cost
$1,306,166)...................... $ 1,306,166
-----------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $206,849,033)... 206,849,033
-----------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$5,525,559,572) (B)........ 99.6% 8,207,273,556
OTHER ASSETS IN EXCESS OF
LIABILITIES................ 0.4 32,666,244
----- -------------
NET ASSETS................. 100.0% $8,239,939,800
----- -------------
----- -------------
<FN>
- ---------------------
ADR American Depository Receipt.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $5,525,559,572; the
aggregate gross unrealized appreciation is $2,735,166,764 and the
aggregate gross unrealized depreciation is $53,452,780, resulting in net
unrealized appreciation of $2,681,713,984.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $5,525,559,572).......................... $8,207,273,556
Receivable for:
Dividends............................................... 32,778,458
Capital stock sold...................................... 14,931,673
Interest................................................ 5,224,905
Investments sold........................................ 1,612,221
Prepaid expenses and other assets........................... 166,936
--------------
TOTAL ASSETS........................................... 8,261,987,749
--------------
LIABILITIES:
Payable for:
Capital stock repurchased............................... 7,769,901
Plan of distribution fee................................ 5,558,099
Investments purchased................................... 4,967,202
Investment management fee............................... 2,892,322
Accrued expenses and other payables......................... 860,425
--------------
TOTAL LIABILITIES...................................... 22,047,949
--------------
NET ASSETS:
Paid-in-capital............................................. 5,514,578,185
Net unrealized appreciation................................. 2,681,713,984
Accumulated undistributed net investment income............. 68,697,317
Accumulated net realized loss............................... (25,049,686)
--------------
NET ASSETS............................................. $8,239,939,800
--------------
--------------
NET ASSET VALUE PER SHARE,
234,620,225 SHARES OUTSTANDING (500,000,000 SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$35.12
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $481,765 foreign withholding tax)......... $109,311,922
Interest.................................................... 31,461,433
------------
TOTAL INCOME........................................... 140,773,355
------------
EXPENSES
Plan of distribution fee.................................... 31,927,881
Investment management fee................................... 16,412,808
Transfer agent fees and expenses............................ 3,673,888
Custodian fees.............................................. 158,456
Shareholder reports and notices............................. 154,452
Registration fees........................................... 79,140
Professional fees........................................... 19,699
Directors' fees and expenses................................ 14,587
Other....................................................... 38,068
------------
TOTAL EXPENSES......................................... 52,478,979
------------
NET INVESTMENT INCOME.................................. 88,294,376
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss........................................... (25,049,646)
Net change in unrealized appreciation....................... 928,676,072
------------
NET GAIN............................................... 903,626,426
------------
NET INCREASE................................................ $991,920,802
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
AUGUST 31, 1995 ENDED
(UNAUDITED) FEBRUARY 28, 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 88,294,376 $ 163,780,281
Net realized gain (loss).................................... (25,049,646) 49,160,950
Net change in unrealized appreciation....................... 928,676,072 11,726,441
------------------ -----------------
NET INCREASE........................................... 991,920,802 224,667,672
------------------ -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................................... (59,686,032) (149,556,111)
Net realized gain........................................... (21,206,038) --
------------------ -----------------
TOTAL.................................................. (80,892,070) (149,556,111)
------------------ -----------------
Net increase from capital stock transactions................ 228,342,743 313,758,060
------------------ -----------------
TOTAL INCREASE......................................... 1,139,371,475 388,869,621
NET ASSETS:
Beginning of period......................................... 7,100,568,325 6,711,698,704
------------------ -----------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$68,697,317 AND $40,088,973, RESPECTIVELY).............. $8,239,939,800 $ 7,100,568,325
------------------ -----------------
------------------ -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1995 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Dividend Growth Securities Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund was incorporated in Maryland on
December 22, 1980 and commenced operations on March 30, 1981.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York or American Stock Exchange is valued at its latest sale price on that
exchange prior to the time when assets are valued; if there were no sales that
day, the security is valued at the latest bid price; (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price prior to the time of valuation; (3)
when market quotations are not readily available, including circumstances under
which it is determined by the Investment Manager that sale or bid prices are not
reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Directors (valuation of debt securities for
which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing similar factors); and (4) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily and includes the accretion of discounts on certain short-term securities.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1995 (UNAUDITED) CONTINUED
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays its Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined at the close of each
business day: 0.625% to the portion of daily net assets not exceeding $250
million; 0.50% to the portion of daily net assets exceeding $250 million but not
exceeding $1 billion; 0.475% to the portion of daily net assets exceeding $1
billion but not exceeding $2 billion; 0.45% to the portion of daily net assets
exceeding $2 billion but not exceeding $3 billion; 0.425% to the portion of
daily net assets exceeding $3 billion but not exceeding $4 billion; 0.40% to the
portion of daily net assets exceeding $4 billion but not exceeding $5 billion;
0.375% to the portion of daily net assets exceeding $5 billion but not exceeding
$6 billion; 0.35% to the portion of daily net assets exceeding $6 billion but
not exceeding $8 billion; and 0.325% to the portion of daily net assets
exceeding $8 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1995 (UNAUDITED) CONTINUED
daily and payable monthly, at an annual rate of 1.0% of the lesser of: (a) the
average daily aggregate gross sales of the Fund's shares since the
implementation of the Plan on July 2, 1984 (not including reinvestment of
dividend or capital gain distributions) less the average daily aggregate net
asset value of the Fund's shares redeemed since the Fund's implementation of the
Plan upon which a contingent deferred sales charge has been imposed or upon
which such charge has been waived; or (b) the Fund's average daily net assets
attributable to shares issued, net of related shares redeemed, since
implementation of the Plan. Amounts paid under the Plan are paid to the
Distributor to compensate it for the services provided and the expenses borne by
it and others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to, and
expenses of, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Investment Manager and Distributor, and other employees or
selected dealers who engage in or support distribution of the Fund's shares or
who service shareholder accounts, including overhead and telephone expenses,
printing and distribution of prospectuses and reports used in connection with
the offering of the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered, may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
The Distributor has informed the Fund that for the six months ended August 31,
1995, it received approximately $5,151,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended August 31, 1995 aggregated
$571,275,764 and $372,845,680, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $340,616,087 and
$284,923,118, respectively.
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1995 (UNAUDITED) CONTINUED
For the six months ended August 31, 1995, the Fund incurred brokerage
commissions of approximately $111,000 with DWR for portfolio transactions
executed on behalf of the Fund. At August 31, 1995, the Fund's payable for
investments purchased included unsettled trades with DWR of $1,762,640.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At August 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $633,000.
The Fund established an unfunded noncontributory defined benefit pension plan
covering all independent Directors of the Fund who will have served as
independent Directors/Trustees for at least five years at the time of
retirement. Benefits under this plan are based on years of service and
compensation during the last five years of service. Aggregate pension costs for
the six months ended August 31, 1995, included in Directors' fees and expenses
in the Statement of Operations amounted to $4,114. At August 31, 1995, the Fund
had an accrued pension liability of $51,455 which is included in accrued
expenses in the Statement of Assets and Liabilities.
5. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED AUGUST 31, 1995 FEBRUARY 28, 1995
--------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.................................... 24,258,723 $ 815,587,759 42,248,385 $ 1,266,049,401
Reinvestment of dividends and
distributions.......................... 2,245,467 75,170,748 4,679,486 138,588,041
----------- ------------- -------------- ---------------
26,504,190 890,758,507 46,927,871 1,404,637,442
Repurchased............................. (19,768,686) (662,415,764) (36,524,071) (1,090,879,382)
----------- ------------- -------------- ---------------
Net increase............................ 6,735,504 $ 228,342,743 10,403,800 $ 313,758,060
----------- ------------- -------------- ---------------
----------- ------------- -------------- ---------------
</TABLE>
<PAGE>
DEAN WITTER DIVIDEND GROWTH SECURITIES INC.
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of capital stock outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS
ENDED
AUGUST 31, FOR THE YEAR ENDED FEBRUARY 28
1995 ---------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992* 1991
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 31.16 $ 30.86 $ 28.70 $ 27.01 $ 23.50 $ 22.47
----------- --------- --------- --------- --------- ---------
Net investment income.............. 0.38 0.72 0.68 0.70 0.71 0.79
Net realized and unrealized gain... 3.93 0.24 2.16 1.72 3.63 1.04
----------- --------- --------- --------- --------- ---------
Total from investment operations... 4.31 0.96 2.84 2.42 4.34 1.83
----------- --------- --------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... (0.26) (0.66) (0.68) (0.69) (0.76) (0.80)
Net realized gain............... (0.09) -- -- (0.04) (0.07) --
----------- --------- --------- --------- --------- ---------
Total dividends and
distributions..................... (0.35) (0.66) (0.68) (0.73) (0.83) (0.80)
----------- --------- --------- --------- --------- ---------
Net asset value, end of period..... $ 35.12 $ 31.16 $ 30.86 $ 28.70 $ 27.01 $ 23.50
----------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 13.90%(1) 3.25% 9.98% 9.13% 18.82% 8.51%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.34%(2) 1.42% 1.37% 1.40% 1.42% 1.51%
Net investment income.............. 2.26%(2) 2.42% 2.31% 2.67% 2.91% 3.62%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $8,240 $7,101 $6,712 $5,386 $4,071 $3,015
Portfolio turnover rate............ 5%(1) 6% 13% 8% 5% 5%
<FN>
- ---------------------
* Year ended February 29.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
BOARD OF DIRECTORS DEAN WITTER
DIVIDEND GROWTH
Jack F. Bennett SECURITIES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they do
not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and directors,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
[GRAPHIC]
SEMIANNUAL REPORT
AUGUST 31, 1995
