On the hunt for dividend champions

"We're seeing healthy yields for good companies," Sentry manager says.

Jade Hemeon 26 April, 2018 | 5:00PM

As the head of the team managing the $4.5-billion Sentry Canadian Income, which focuses on North American dividend-paying stocks, Michael Simpson is navigating the challenges presented by rising interest rates.

Rates in much of the developed world have been edging up as economic growth and job creation gain strength, and the trend has set off stock-market jitters. This year has seen heightened volatility and some painful corrections in U.S. and Canadian stocks, particularly in the interest-sensitive, dividend-paying companies that populate Simpson's portfolio. Sentry Canadian Income suffered a 4.3% loss in the three months ended March 31.

"The interest-rate-sensitive stocks have been hit, but that means greater value has surfaced," says Simpson, senior vice-president and executive portfolio manager at Toronto-based Sentry Investments. "As a result of price drops, yields have risen on stocks." Simpson has managed the fund since it was launched in early 2002 and is responsible for its average annual return since inception of 10.7%.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alimentation Couche-Tard Inc42.31 CAD1.41
Allergan PLC  
AltaGas Ltd15.41 CAD-0.39
Applied Materials Inc54.39 USD-1.15
Bank of Nova Scotia51.10 CAD-0.70
CVS Health Corp63.33 USD-0.02
Enbridge Inc43.97 CAD0.18
Fortis Inc50.62 CAD1.00
Oracle Corp52.62 USD0.77

About Author

Jade Hemeon

Jade Hemeon