Investors gravitate towards dividend stocks

March 30, 2010

In the first quarter of 2010, the major North american equity indices again saw gains  as markets took a breather from the torrid rise of the previous three quarters.

The S&P TSX Composite was up 3.1% while the broad S&P 500 was up 5.4%. In Canada, the financial sector was the best performer during the quarter as banks reported earnings and loan losses that were, in most cases, better than analyst expectations.

The energy, materials and gold sectors all had flat or negative returns as investors gravitated towards quality and safety in the marketplace, often in the form of companies that pay growing dividends.

In the shift from growth to dividends, Leon Frazer client portfolios are well-positioned.

We hold a high concentration of companies from those industries that make up what we like to call “the backbone of the economy,” namely utilities, pipelines and telecommunications. All of our core holdings in these sectors increased their dividends during the quarter and enjoyed capital price appreciation. As investors, we enjoy getting back in dividends the dollars we spend every month on fees and services from the likes of BCE, Enbridge and the Banks.