We believe investing in high-quality companies with growing dividends in a concentrated, diversified portfolio provides the best opportunity to achieve superior risk adjusted returns.
We also believe that quality growth investing is a durable, repeatable process that delivers excess returns over complete market cycles. Real wealth is created through the power of compounding inherent in owning successful companies that grow dividends from operations over long periods of time.
Our efforts focus on identifying and then investing in U.S. and global businesses that are best positioned to capitalize on long-term growth opportunities, driven by high and consistent dividend growth, superior financial strength, proven management teams, a sustainable competitive advantage and reasonable valuations. We hold the view that such exceptional companies not only have the potential to contribute outsized returns but are also inherently less risky, resulting in less volatility during declining markets.
The main components of our philosophy are, as follows:
Dividend Growth – A steadily rising dividend is an important indicator of future stock price appreciation. The ability over time to maintain dividend increases, supported by increasing cash flows in excess of operating and financing needs is a prime indicator of a true growth opportunity.
Quality – Quality has historically delivered a return premium. High quality companies support their dividends from operations, not financial engineering. The quality of investments matters more than the quantity.
Focus – We are extremely selective. About 350 companies qualify for initial consideration; only 20 make the final cut. A focused portfolio allows superior stock selection to have a meaningful impact on performance.
Downside Protection – Superior downside capture allows us to compound wealth for our clients off a higher base.
Long-Term Mindset – We partner with great businesses for the long-term. A patient approach with low portfolio turnover delivers an attractive performance profile and mitigates portfolio volatility.
By adhering to our philosophy and disciplines of primary research, quality, focus, objective valuation, and patience, we have been able to achieve superior and consistent returns with less risk versus benchmarks.