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The Importance of Dividends

The Importance of Dividends

In recent years, both corporations and individual investors have re-evaluated the importance of dividends. Dividends can be a key indicator of disciplined management and lower relative volatility. Stocks of companies with the ability to increase dividends regularly have historically tended to perform better than other stocks in difficult markets. Unlike earnings, which can be manipulated, dividends are a real reflection of a stock’s worth. Earnings can help a company grow, but dividends are real money, not just numbers on a balance sheet, and this makes manipulating earnings much more difficult. In addition, dividends can provide an objective measure of a company’s health, value, and profitability.

Income investments can help:

Supplement Your Salary

Grow Your Portfolio

Reduce Portfolio Volatility

Fight Inflation

Your Risk Determines the Right Mix

Your Risk Determines the Right Mix

The challenge is to find the right mix of income-oriented investments given your individual risk profile and goals. That is why we utilize cutting-edge technology that helps us understand how much risk you are comfortable with in your portfolio. 

We have partnered with a leading financial technology company called “Riskalyze” to capture a quantitative measurement of your risk tolerance, and use that data to quantify suitability and build customized portfolios that are consistent with your risk tolerance.

Income Products We Utilize 

Dividend Stocks

Preferred Stocks

Covered Calls on Stock Positions

Cash Secured Puts

Closed End Funds 

Master Limited Partnerships (MLPs)

Exchange Traded Funds (ETFs)

Real Estate Investment Trusts (REITSs)

Municipal Bonds

Corporate Bonds 

A Value-Based Approach

A Value-Based Approach

Our core approach to investing in dividend stocks is value-based. We seek the best value-based conservative blue chip companies that reward shareholders with above average dividends and have the potential to grow those dividends in the future. Sample dividend stock criteria includes:

  • Years of uninterrupted dividend payments
  • Number of consecutive dividend increases
  • Dividend yield
  • Payout ratio
  • S&P quality rankings
  • Year-over-year earnings improvements

MLN believes the need for dividends is here to stay and that companies with the potential for rising dividends and strong identifiable competitive advantages should provide a foundation for any income-oriented portfolio.

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DISCLAIMER: Dividends are not guaranteed, and a company's future ability to pay dividends may be limited. A company currently paying dividends may cease paying dividends at any time.