Expert Advice: Why Invest in Dividend Paying Stocks

Investment manager Frank Stadler says all investors in Canadian equities should have a dividend-paying strategy for their portfolio. According to Stadler, who works with retail and institutional investors at Crusader Asset Management Inc., there is compelling evidence that high dividend stocks offer superior returns.

Frank Stadler, an investment manager and advisor with Crusader Asset Management Inc., thinks high dividend stocks are a key part of a well-constructed portfolio.

Stadler, who directly manages or advises clients whose collective assets under management are in excess of $21 billion and has nearly 30 years of capital markets experience, has spent a lot of time comparing the available data on dividend paying stocks as well as non-payers, and found compelling evidence to support his belief that Canadian dividend paying stocks generally offer superior risk and return prospects. Over the last four decades, there have in fact been instances in which dividend-payers outperformed non-dividend-payers by as much as 9.1% annually, giving the investor 23 times the return for the holding period.

Stadler also argues risk can be far less for dividend paying stocks, while “maximum drawdown,” or the greatest negative percentage returns for any given period, was also much lower.

Any investor looking to have a well-balanced portfolio in Canadian equities should have a strong dividend strategy, Stadler says, and a careful consideration of the empirical evidence proves it.

To read Frank Stadler’s analysis of the benefit of investing in high dividend stocks, click here.

3 years ago