We believe that investing in high quality companies with growing dividends provides that best opportunity to achieve better than market returns with less than market risk, providing superior performance in rising markets, while preserving capital in falling markets. Accordingly, our efforts focus on identifying and then investing in a concentrated portfolio of high quality companies that we believe are capable of delivering high and consistent dividend growth, supported by reliable revenue and net profit growth at reasonable valuations.
We seek to invest in U.S. and global businesses best positioned to capitalize on long-term growth opportunities, driven by stronger than average dividend growth, a sustainable competitive advantage, superior financial strength, proven management teams and powerful products or services. 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.