Looking Beyond The Yield Grab

Don Wordell, manager of the $2.7 billion RidgeWorth Mid-Cap Value Fund, loves the financial discipline a steady dividend imposes on corporate managers, but isn’t easily swayed by a fat payout. In a recent discussion, Don explained why he’s careful not to be blinded by yield and what makes him bullish in materials, industrials and energy.

There’s nothing sexy about it. Every stock in the portfolio pays a dividend, not because we think they are a panacea but because we like the characteristics of dividend-payers, and management teams and boards loathe cutting a dividend. If they commit to paying one they are sending a pretty tremendous signal on how they feel about the health of their business model. Even more important are companies that have paid them (and grown them) through varying economic cycles.

Source: Forbes

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