Fund Manager Picks Dividend Stocks

Alanna Petroff: Making a quick buck in the market is good for some. But for others, it's all about long-term investing in stable companies that pay a nice dividend. That's what Hugh Yarrow focuses on. He is a fund manager at Wise Investment and he manages the Evenlode Income Fund. He joins me today for “Fund Managers’ Favourites” to talk about his three favorite dividend paying companies. Hugh, thanks for joining me. So, let's go over your investment strategy briefly.

Yarrow: Well, my focus is on businesses that own intangible assets; so brands that have trusted reputations. These are generally quite friendly to shareholders and good for long-term dividend growth because they generate a lot of excess cash flow. But because they don’t have much in the way of physical assets, most of that is left over for shareholders. They'll invest a little bit in the growth of the business, generally at a high rate of return and that will drive the dividend growth going forward. So, it's well-suited for long-term dividend growth investing.

Source: Morningstar

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