Dividend-Paying Stocks On Discount: Portfolio Managers
While European debt concerns continue to spook the market, portfolio managers say there's plenty of ways to make money, if you have the nerve to stick with dividend-paying companies over the long term.
"There's alot of opportunity for the long-term investor to buy high-quality companies at a discount," says Rob McIver, president of the Jensen Fund.
Notwithstanding current market turmoil, McIver says he's finding plenty of companies with consistent, sustainable cash flows and earnings, enabling them to reward their shareholders.
McIver is not alone in his bullish sentiment. The CBOE Volatility Index (VIX), also known as the "fear index," last traded a little over 26 — a level which signals investor confidence is picking up.
That said, there are some factors keeping Ted Parrish, portfolio manager for the Henssler Equity Fund, in a "defensive position."
"We've sold off some health care companies that are exposed to what's going to happen if [congress] cuts health care and defense," said Parrish.
Otherwise, Parrish says being "defensive" means investing heavily in the consumer staplessector.
The Henssler Equity portfolio includes companies like PepsiCo , Kimberly-Clark , Proctor & Gamble and Church and Dwight .
"These companies have been around a long time, selling products that are in high demand, and will stay in high demand. They have optimal debt structures. They pay a dividend, and those dividends are safe," reasoned Parrish.
On the other hand, McIver says he finds consistent dividends across multiple sectors. In his portolio are Praxair , Oracle , and Varian Medical Systems .
While they are diverse, McIver says these companies "create shareholder value and real returns."
He also thinks these companies are strong enough to avoid market turmoil in both Europe and the US.
Additional News: Praxair to Present At CITI Symposium
Rob McIver is personally invested in the "Jensen Quality Growth Mutual Fund" which holds the aforementioned securites. Ted Parrish does not own the aforementioned stocks directly, but does own shares in the Henssler Equity Fund.
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