Perspectives Blog

Building wealth through dividend investing

February 18, 2014

…file that protects on the downside yet captures enough upside over time to produce solid, risk-adjusted returns Dividends in the total return equation For long-term investors, dividends provide a source of repayment on their initial investment. The more you get up front, the less you have to rely on less-predictable capital appreciation for the cash return on an investment. And, historically, dividends have been an important component of total r…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

…rong performance of high dividend equities, what about the prospects for dividend growth? The potential of stock dividends to grow with earnings provides a meaningful benefit when using high-yielding equities as a source of income in a portfolio. Unlike bonds where income is fixed, stock dividends can provide a measure of inflation protection. In the three years ending last year, market earnings have grown by nearly 9% per annum but market divide…

Three reasons why REITs can continue to rally

Arthur Hurley, CFA, Senior Portfolio Manager | May 19, 2014

…year. This is not likely enough to significantly move NAVs in the near term, but the trend is worth watching. 3) Dividends are still attractive and continue to grow Companies continue to increase dividends, and we expect 2014 to be similar to 2013 with the weighted average dividend increase in the low double digits. Payout ratios remain at historic lows, with the group’s cash payout ratio at approximately 75%. The long-term average is in the low…

Corporate governance – The next catalyst for Japanese equities

Daisuke Nomoto, Senior Portfolio Manager | August 4, 2014

…o be included have to make efforts to improve their capital efficiency – hugely positive for ROE anyways! Higher dividends and higher buyback We are starting to see Japanese companies significantly increase dividends and share buybacks (Exhibit 2). With a record $2.3 trillion total cash on corporate Japan’s balance sheet, it is highly likely that Japanese companies will increase dividends and do further share repurchases to mitigate the drag of e…

The new tax regime and stock compensation

Abram Claude, Vice President, Columbia Management Learning Center | October 30, 2013

…at the time of the grant, which includes receiving dividend payments even when those shares have not yet vested. Dividends received before vesting are treated as wage income and taxed as ordinary income. Note: The 60-day holding period required for qualified dividends does not begin until the vesting date unless the recipient made an 83(b) election to pay taxes at the grant date (only permitted for restricted stock, not for restricted stock units…

The role of asset location

Abram Claude, Vice President, Columbia Management Learning Center | October 23, 2013

Financial advisors and investors should have a good understanding of what is different about taxation in 2013 and beyond – and how it affects after-tax returns. An asset location strategy should consider the benefits of placing less tax-favored investments under tax-deferred or tax-free registrations in order to increase after-tax returns. The Columbia Management Learning Center is dedicating a series of blog articles to this important and time…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

Investors could find opportunity in capital expenditures. Strategic positioning in these areas is key to opportunity. Shale gas and automation are leading the charge in innovation. Cash balances at U.S. non-financials corporations have exploded in the post-crisis era, up 75% since the end of 2007. This is despite a rising return of cash to shareholders in the form of dividends and share repurchases. However, capital expenditures and reinvestme…