McKinney Likes Batting Average of Dividend Stocks

Burns McKinney is a Dallas-based portfolio manager at Allianz Global Investors, where his purview includes the Allianz NFJ Dividend Value Fund (PNEAX), the Allianz NFJ Global Dividend Value Fund (ANUAX) and the Allianz NFJ International Value Fund (AFJAX). He sees these funds as residing at the intersection of high dividend yields and value investing. A Texas Rangers fan, he compares dividend-paying stocks to hitters with high long-term batting averages.

“Dividend-paying stocks have outperformed the broader market about two thirds of the time in the past four decades,” he says. “We also like the fact that they’ve specifically tended to outperform in down markets, so they’re defensive.” He thinks they’re a particularly good way to play international markets with a high degree of safety. “Because they pay dividends they’re not startups, they’ve been around the block, typically have cleaner balance sheets and more earnings transparency,” he says. “You can’t manipulate a dividend and you can’t restate a dividend.”

Source: Barons

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