Quarterly Kempen Global Small-cap strategy

Brunswick Corporation

Looking back at Kronos Worldwide

First Solar

Dividend Update: All set for a style reversal?

It’s been a hard year for the value stocks that our dividend strategy typically invests in. Growth stocks have outperformed them this year (as they did in 2019), such that the valuation gap between the two has hit a historical high – growth stocks had become 230% more expensive than value firms by the end of September based on a composite of four valuation measures – P/E, P/CF, P/B and dividend yield.

Dividend update videos

Dividend is the backbone of our investment strategy. Providing a consistent return to shareholders urges companies to carefully manage their cashflows and balance sheet, and scrutinize their investment decisions. As the economy has come to an abrupt stop due to the COVID-19 crisis, regulators, companies and even investors are questioning whether it is prudent to return cash to shareholders when the outlook is filled with uncertainty. We agree, some companies will need all their available resources to weather the crisis. Many others however, are according to our opinion in good shape financially to see this through. Some companies are simply not impacted much directly.

Monthly Commentary

Following the election (and Trump’s legal shenanigans) in the US, and news of the Pfizer vaccine over the last week, anything I write about market events in October will have been superseded by the time this missive arrives. I want to take this opportunity instead to examine a wider issue that has been under examination recently, and one that is going to become quite topical for all governments as they begin to chart a way to recovery: do government deficits matter anymore?