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Strategic Dividend Investment Strategy 


In 2004, Orleans Capital launched another opportunistic equity investment strategy, the Strategic Dividend Investment Strategy, designed to provide clients with a source of stable income with strong growth potential and take advantage of the historic outperformance of dividend paying stocks and a unique market opportunity. Among other things, the continued convergence of stock and bond yields provided an opportunity to create an equity portfolio which would provide investors with a meaningful increase in portfolio income and yield versus traditional fixed income investments with an enhanced likelihood of price outperformance.


Strategy Summary:

  • Strategic Dividend strategy designed to provide source of stable income with strong growth potential and take advantage of current market opportunity.
  • The convergence of stock and bond yields created an opportunity for a meaningful increase in portfolio income and yield versus traditional fixed income investments with an enhanced likelihood of price outperformance.
  • Current yields on traditional fixed income securities are in many cases equal to that of yield oriented stocks, and certain equities now offer similar or superior yield and a better opportunity for price appreciation.
  • In addition, the reduction of the tax on dividend income increases the real after tax income on dividend stocks versus fixed income securities, making these stocks more attractive to some investors

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Investment Criteria:

  • Publicly traded U.S. domestic equity securities.
  • Specific dividend/yield characteristics which include (1) high current dividend with modest dividend growth prospect and (2) moderate current dividend with high dividend growth prospects.
  • Company commitment to appropriate dividend policy.
  • Dividend growth expectation must be coupled with historical growth and economic capability to expand dividend.
  • Forecasted earnings and revenue growth sufficient to support increased dividends.

 

 

 

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