Rising valuations pose equity-income challenge

Guardian's Michele Robitaille trims energy holdings.

Sonita Horvitch 14 May, 2014 | 6:00PM
Facebook Twitter LinkedIn

Michele Robitaille, managing director and equity-income specialist at Guardian Capital LP, says that the environment for dividend-paying securities should continue to be positive this year, as interest rates are likely to remain benign.

"Ultimately rates will rise, but the long-term case for dividend payers remains intact," she says. "Dividends have been a larger and more reliable contributor to stock returns than price appreciation over the past 40 years." Also, she says, those businesses that are growing their dividends "will continue to be well placed in a rising interest rate environment."

The shorter-term challenge in the equity-income space, Robitaille says, is that valuations across the board have risen sharply over the past couple of quarters. This covers "everything from real estate investment trusts (REITs) to banks to utilities." Energy producers and more particularly energy-infrastructure companies have also seen valuations increase substantially, she says. "Energy ran hard in the first quarter of 2014 and energy-infrastructure stocks ran even harder."

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free
Facebook Twitter LinkedIn

About Author

Sonita Horvitch

Sonita Horvitch  

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies