At Hamlin, we have always pursued a seemingly antiquated strategy: make an investment and get paid a cash return. We purchase stocks run by executives who have pledged to return a significant portion of their earnings to shareholders quarterly. Celebrated value investor, Ben Graham, wrote in 1934, “The prime purpose of a business corporation is to pay dividends to its owners. A successful company is one that can pay dividends regularly and presumably increase the rate as time goes on.” While a logical philosophy, we are among the relatively few investment strategies dedicated exclusively to income equity investing. Importantly, we do not think that income and growth are mutually exclusive.
As you know, we spend most of our time on individual security analysis. While some of these “bigger picture” musings inform our company revenue forecasts and help us manage risk, we believe that accurately predicting what the economy or stock market will do in a given year is all but impossible. We only share these macro thoughts to respond to our institutional and individual clients’ frequent requests for a broader market outlook. To the extent that the “known” risks discussed below or unexpected adverse developments send equities lower, expect us to focus on the longer-term total return potential for a portfolio of quality, high-dividend yielding companies. With an eye on future returns, we are likely to invest available cash in downturns and seize opportunities to swap into faster-growing companies that meet our yield, balance sheet and return on capital criteria.
Fundamentally, the case against Tech is mixed. We see little on the horizon likely to upset the shift to cloud computing, the primary engine of technology company revenue growth. Aggregate sales of Amazon Web Services, Microsoft Azure and Google Cloud Platform are approaching $70 billion—a large number but still a fraction of the $3.5 trillion global IT market.
Looking Under The Hood Of Passive Investment Vehicles – Exchange Traded Funds
November 15, 2015
It is not often I write about something that we do not use. I write because the expanded usage of Exchange Traded Funds (ETF) has introduced a layer of complexity into the market place that should be duly noted. The world saw some of the flaws during the morning of August 24th, 2015 when many of the largest ETF prices fell far greater than the stocks they owned.
Wealth is the American dream. Income, financial investments, real estate and fine art, are among the items that measure wealth. Wealth offers its owners the potential to live their days in pleasures and their years in prosperity. Yet many people who have wealth are cash poor.
At Hamlin, we have always pursued a seemingly antiquated strategy: make an investment and get paid a return. Ben Graham wrote in 1934, "The prime purpose of a business corporation is to pay dividends to its owners. A successful company is one that can pay dividends regularly and presumably increase the rate as time goes on."
Empirical Results of the High-Income Investment Strategy
December 29, 2013
The 2013 Economic Sciences Nobel Memorial Prize was awarded to three finance scholars, Eugene Fama, Lars Peter Hansen and Robert Schiller for their work on asset-prices in financial markets.
Over the past twelve years, the high yield tax-exempt bond market has seen significant growth of bonds issued by charter schools. this growth is fueled by a national outcry for K-12 education reform.
A Short Treatise on Dividend Stocks: In the aftermath of the 2008 financial crisis, the US Federal Reserve implemented an unprecedented easy money policy to stimulate the economy and to improve employment.
