Big dividend increases… September 20, 2019

| Friday, September 20th, 2019 | Comments Off on Big dividend increases… September 20, 2019

It’s been another big week for macro market news, as the Jerome Powell-led Federal Reserve cut interest rates for a second time in 2019. The Federal Funds rate now stands at 1.75%, and with it policy is now ‘dovish’ once again. We won’t get started here why we think this is an unfortunate turn of events… Instead we want to highlight another piece of news, the kind most market participants greet with a shrug, but from our viewpoint is about as good as any piece of information we can receive. This week we had four of our holdings announce significant increases to their cash dividends:

Texas Instruments (TXN): +17%
US Bank (USB): +14%
JP Morgan Chase (JPM): +13%
Microsoft (MSFT): + 11%

This kind of information is fundamentally important to how we invest client money, and we believe that over time this growth in income from our holdings acts as the ‘engine’ of long term total returns. So as most investors, and certainly the financial media, focus on ‘juicier’ stories we’ll be content to celebrate other pieces of news, like a material rise in cash streaming into our clients’ accounts.

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