Investment Approach

We specialize in structuring proprietary “dividend growth” equity portfolios that are designed to address your specific objectives for growth, income and capital preservation. The majority of stocks selected for client portfolios have a minimum ten year history of uninterrupted dividend growth and are projected, by our analysis, to grow that dividend income in future years. Depending upon client circumstances, portfolios may also include allocations of additional assets classes, including fixed income (bonds), foreign investments, REIT’s and MLPs.

We embrace the fundamental value of dividend-paying stocks and attempt to capture the superior historical returns of the dividend growers. The fundamental concept underlying this strategy is that annual dividend income enhances long-term performance and dampens near-term risk. The lower risk profile of dividend paying stocks helps protect the portfolio if the market moves lower which then provides a higher base when the market recovers. Furthermore, if needed, the dividend income can meet an investor’s annual cash needs without the need for principal consumption. If reinvested, the dividend income accelerates long-term performance through purchases of additional shares.

This disciplined approach isolates a limited number of very sound companies with excellent business models. In particular, these “dividend growth” companies:

• Have a demonstrated ability to survive recessions, inflation, terror attacks, war, technological change, etc.;
• Are a biased selection of companies that can fund growth and pay dividends;
• Have products and/or services that have stood the test of time;
• Provide consistent and predictable cash returns thus allowing the investor to accept more equity exposure.

Although our equity portfolios tend to be relatively conservative and generate significant levels of current income, client circumstances often warrant the construction of a “balanced” portfolio, i.e., one that has an allocation to fixed income securities as well as to equities. Verity Investment Partners meets this need for balance through the development of fixed income portfolio allocations that support and complement the income-producing equity strategies developed for each individual client.

Philosophically, we look to a client’s equity allocation for income and growth, and therefore we tend to see a client’s fixed income allocation in a more conservative mode, i.e., capital preservation and income. Consequently, we strive to preserve market values through the selection of short to intermediate term fixed income positions that do not have high exposure to changing interest rates. Depending on each client’s tax situation, we generally construct five to seven year fixed income “ladders”, utilizing corporate and/or tax exempt securities.