At Randall-Roberts we believe the core of a stock portfolio should consist of high-quality, dividend-paying companies whose management has demonstrated the ability to be excellent stewards of capital over time. On a 40 year timeline dating back to 1972, dividend-paying S&P 500 stocks outperformed non-dividend paying S&P 500 stocks by 7.2% and proved to be much less volatile. Our investment approach for dividend-paying companies consists of a security selection analysis that includes an assessment of company credit worthiness, sustainability of cash distributions or dividends, economic sensitivity, and relative yields versus the market.
If you count on your investments for dependable monthly income, two of your biggest concerns should be capital preservation and income reliability; your standard of living depends on consistent monthly investment income to cover your monthly bills and to supplement your savings. As a result, when markets are volatile and capital gains turn into capital losses, clients can still look to dividends for consistent monthly income streams.