Bahl & Gaynor believes an increasing focus on short-term results in financial markets is at odds with sound investment principles. High-quality, well-managed companies that exhibit consistent earnings growth and pay a growing dividend are often overlooked as competitive investment options. We find these attributes extremely attractive and worthy of long-term investment.
Conviction in the power of a strong dividend policy underlies our investment philosophy. A company’s dividend policy is indicative of:
Regular dividends that follow a defined payout ratio are a useful proxy for management's confidence in the business.
The ability to pay cash from reported earnings points to the inherent quality of those earnings.
The ability to pay a dividend is an important indicator to investors that the company has a proven and sustainable business model.
Dividends are a powerful tool in communicating financial health to capital markets.