A Case for Dividend Growth Strategies
Author(s): Tianyin Cheng, Associate Director Strategy Indices; Vinit Srivastava, Managing Director Strategy & Volatility Indices, S&P Dow Jones Indices
Published: January 11. 2017
Dividend strategies have gained a foothold with market participants seeking potential outperformance and attractive yields, especially in the low-rate environment since 2008 financial crisis. While traditional high dividend payers have performed strongly in recent years, they have become quite expensive by most valuation metrics. The previous low-interest-rate environment paved the way for many of these businesses to load up on debt to expand their operations, while continuing to pay high dividends. As a result, many of these companies may come under pressure when rates rise. Stocks with a history of dividend growth, on the other hand, could present a compelling investment opportunity in an environment of potential volatility and rising rates. An allocation to companies that have sustainable and growing dividends may provide exposure to high-quality stocks and greater income over time, therefore buffering against market volatility and addressing the risk of rising rates to some extent.
All white papers posted were created by the listed authors who are solely responsible for the research, finding and all materials contained therein. Pensions & Investments has not verified or edited the materials (other than for length and style) and does not necessarily agree or disagree with the analysis and positions expressed by the authors. Reference to any company, product or service does not imply recommendation or sponsorship by Pensions & Investments.
By downloading a white paper, you may be contacted by the white paper sponsor.
For more information on submitting a white paper, please contact Richard Scanlon at firstname.lastname@example.org or 212-210-0157.