The markets seem to have closed a 10-year bull cycle characterized by asset price
\ninflation due to the various non-conventional policies of the central banks. Since
\nSeptember, operators have become aware that we are moving into a new world, or rather that we are
\nreturning to an old, “normal” world, without “quantitative easing”, where the risk must be remunerated at
\nits fair value. A paradigm shift, central banks will no longer be present in the event of a significant market
\ndownturn, and as Warren Buffet points out, it is when the sea recedes that we discover bathers without
\nbathing suits….<\/p>\n
However, this is not a “return to the future” in 2001. Corporate balance sheets are robust. The evolution of So what can we do to limit the performance shortfall when we are locked into equities?<\/p>\n So back to basics: for a minority shareholder, the stock price is no more than the discounted value of future To rephrase the famous words attributed to Herriot, the dividend is a bit like culture: it is what you Who are they? High dividend paying companies generally belonging to industries whose activity is These returns seem so high compared to equivalent investment grade issuers that it is legitimate to But if the price falls, is it for a good or bad reason? If it is for a good reason the payment of the future But in a period of rising interest rates, what is the future for this type of strategy? Answering this issue is If economic growth, which we anticipate decelerating but still expected in 2019, generates low inflation, According to Eric Labb\u00e9, Thematic equity manager at CPR AM, for 2019, the high dividend strategy is therefore an advantageous alternative in the framework of defensive equity management in the context of a challenging market.<\/p>\n","protected":false},"author":1,"featured_media":76325,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1483],"tags":[1663,1655,1801,1651,1807,1877,2037,2068],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/76327"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=76327"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/76327\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/76325"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=76327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=76327"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=76327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The winners of this turnaround cannot, of course, be the same as those of the previous phase. The
\nperformance gap between growth stocks and value stocks has widened to levels that are no longer
\nsustainable. Volatility, squeezed by torrents of liquidity, is reappearing.<\/quote><\/p>\n
\naccounting rules, post-Internet bubble, protects us from fanciful arrangements by acquisition with an
\nuncontrollable stack of goodwill and the junk debt that go with it; banking prudential regulations, post
\n2008, then 2011, have been considerably strengthened. But if companies and banks have learned the
\nlesson, is the same true for investors?<\/strong><\/p>\n
\ndividends. However, dividends, which are a real communication tool for the company towards its
\nstockholders, are much less volatile than profits and are much better steered during a recession phase,
\nwhich gives a defensive character to this type of strategy.<\/strong> I grant you, all this is much less glamorous than
\nthe story telling of Silicon Valley businesses that are growing at a high pace, but whose shareholder returns
\nare based solely on the expectation of comfortable capital gains. Did you say 2001…? <\/p>\n
\nremember when you have forgotten everything. As for dividend paying companies, investors have
\nindeed unfairly neglected them in recent years, to such an extent that they are at the core of “value”
\ninvestment strategies.<\/strong><\/p>\n
\nsustainable, in markets with barriers to entry, in sectors that have been established for a long time…while maintaining transformation capacities.<\/strong> Thus, while inventing the sustainable city of tomorrow,
\nUtilities are characterized by healthy balance sheets and recurring revenues that generate returns of…
\n5.5%, the same for the Insurance and Media industries, which can sometimes achieve returns of 6.5% or
\neven 7%.<\/p>\n
\nquestion the causes of the levels achieved. Is it because the dividend is high or because the price is too
\nlow? In reality, the dividend is moderately growing, because of governance issues. In conclusion, it is
\noften the clear undervaluation of the stock that justifies the return.<\/strong> Did you say value investing…?<\/p>\n
\ndividend is not secured, whereas if it is for a bad reason (a market over-reaction), then we have an entry
\npoint. Identifying the next dividend and assessing its probability of actually being paid is at the heart of the
\nmanagement process of the CPR Invest Euro High Dividend, which should deliver a dividend yield of 6% in
\n2019. Select value stock with sustainable high-dividend is OK… but only with a high quality balance
\nsheet.<\/strong><\/p>\n
\nlike predicting which growth rate: that of dividends, or that of discount rates, will grow the fastest.
\nAlternatively, why will rates rise and what will be the impact on companies’ earnings?<\/p>\n
\nthen nominal corporate earnings will increase and with them the dividends distributed. At the same time, a
\nQuantitative Tightening policy (QT) correctly anticipated by investors and monitored by the ECB will result
\nin a moderate increase in interest rates. The increase in dividends will outweigh the increase in discount
\nrates, and the strategy will continue to outperform.<\/p>\nFor 2019, the high dividend strategy is therefore an advantageous alternative in the framework of
\ndefensive equity management in the context of a challenging market.<\/quote><\/p>\n","protected":false},"excerpt":{"rendered":"