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Stifel Nicolaus Portfolio Manager Chad Morganlander explains why he is bullish on dividends.
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Well my next guest has good news for dividend investors is that you Chad Morgan lenders to -- portfolio manager joins me now.
But it's higher our use today and I hope you're right.
The dividend yields are gonna be coming back -- this year.
Strongly why do you believe that.
Well we still think that there could be the earnings with the S and he's gonna be growing at about five to 6% rate.
And GDP as well be up about one to 2% so what you're essentially gonna see here is strong free cash flow that's gonna fault in a bottom line for dividend investors.
So we are somewhat more constructive on the S and Keefe in the short and intermediate term for now.
Let me ask you this lesson -- on the show and I'm -- you an -- your colleagues and Stifel Nicolaus were leaning more towards bonds and away from equities.
No changing that perspective you're saying that you should bet on Sachs is -- the dividend story or is it a growth story.
Bullets -- is a combination of both its dividends its growth it's the US economy moving in a prefer innate in me in a persistent manner.
Up somewhat OK as well keep in mind the ECB has changed their role and they've taken on about 3.5 trillion dollars.
Of debt.
Which is Scott -- here trading in Europe and as well as propelled the equity markets higher on -- global base right so you're not concerned about Europe is it that the ECB is actually other actions are in line right now with what you wanna say because I've heard right -- -- for the right temporarily okay this is a -- That is moving the markets higher.
We are still in the early innings of the European.
I would say debacle -- issues that are being held here OK so you're gonna see a slowdown within European economy.
And that's gonna take about 24 months to -- -- to play out.
Citizen we're looking at the close of the European markets which are just got -- too long ago and it looks like really Greece.
And the EU overall -- -- -- coming to a deal looks like we're getting more agreement from the Greeks I don't think that the news is more positive today -- -- Europe then.
Right what's gonna happen in nine months from -- Or early that's true it's Greece today but it's going to be Portugal and our lanes of okay and a couple of months to six to nine months where Portugal is gonna have to take a haircut.
And then -- behind that should be Ireland.
So what's -- with Ireland well it's -- -- in Davos a heck of a lot of debt accounts sovereign side and then we'll have to restructure.
And this is something that.
The viewer as well as investors should just keep a careful eye on so we're not saying that we're long term bullish for the next three years but you could be more constructive on equity market on the equity markets US equity markets and that's for -- dividend story is coming in US I mean.
Large -- multinationals but US talks basically indeed that's exactly right.
