Why Dividends Matter
We emphasize dividend paying stocks in our portfolio for a number of reasons:
- Dividends provide stability and reduce portfolio volatility.
- Stocks that pay dividends have historically produced higher returns on average than non-dividend payers.
- Cash returns are generated regardless of stock price movement.
- Dividend payouts demonstrate good corporate behavior and reflect management’s confidence in the future.
We believe that the opportunity to generate superior risk-adjusted returns over an entire market cycle is best achieved by:
- Participating in rising markets while avoiding speculative investments.
- Protecting capital in down markets.
- Reducing volatility in client portfolios.
- Concentrating on stocks with superior dividends.
- Maintaining a long-term focus on value realization.
First Fiduciary’s value-oriented equity philosophy is centered on investing in large, well-established companies selling at significant discounts relative to their intrinsic values. Importantly, we look for these companies to be rich in assets and possess strong dividend-paying capacity.
Our emphasis in fixed income management is on:
- Treasurys, agencies, investment-grade corporate bonds
- High-grade municipals, when appropriate
- Highly liquid
- Maturity structure
- Typically laddered to an average maturity of ten years or less