Strategic Dividend Equity

Strategic Dividend Investment Strategy

In 2004, Orleans Capital launched another opportunistic equity investment strategy, the Strategic Dividend Investment Strategy, designed to provide clients with a source of stable income with strong growth potential and take advantage of the historic outperformance of dividend paying stocks and a unique market opportunity. Among other things, the continued convergence of stock and bond yields provided an opportunity to create an equity portfolio which would provide investors with a meaningful increase in portfolio income and yield versus traditional fixed income investments with an enhanced likelihood of price outperformance.

Strategy Summary

Strategic Dividend strategy designed to provide source of stable income with strong growth potential and take advantage of current market opportunity.
The convergence of stock and bond yields created an opportunity for a meaningful increase in portfolio income and yield versus traditional fixed income investments with an enhanced likelihood of price outperformance.
Current yields on traditional fixed income securities are in many cases equal to that of yield oriented stocks, and certain equities now offer similar or superior yield and a better opportunity for price appreciation.
In addition, the reduction of the tax on dividend income increases the real after tax income on dividend stocks versus fixed income securities, making these stocks more attractive to some investors.

Investment Criteria

Publicly traded U.S. domestic equity securities.
Specific dividend/yield characteristics which include (1) high current dividend with modest dividend growth prospect and (2) moderate current dividend with high dividend growth prospects.
Company commitment to appropriate dividend policy.
Dividend growth expectation must be coupled with historical growth and economic capability to expand dividend.
Forecasted earnings and revenue growth sufficient to support increased dividends.