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BlackRock Exec on Dividend Growth

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    BlackRock equity dividend fund manager Bob Shearer on investing in dividend-paying stocks.

  • Duration 3:42
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Thank you so much thanks article looking for steady income year -- just not gonna get it hasn't talked about a few minutes ago from treasuries -- show -- that yield every day mean.

Just hovering around record lows -- know it's gone up a little bit on the ten year above one point 6% but.

How about dividend paying stocks as an alternative.

Bob -- will know the answer to all of that Bob is the lead portfolio manager a black rocks equity dividend fund manages.

34 billion dollars in assets and Bob just look at the markets today 205 point gain on the Dow.

Your biggest movers on the upside among sectors are financials.

And energy you're dividend right stocks is that is is some of that drive in money finally and equities here.

Well I think you know we've they had not do you want a rough couple weeks in the market -- we are due for a lift.

Clearly energy had come down.

But the really we need to have to find a floor around the 8590 dollar level.

You know that's starting touch -- the marginal oil projects are there's also the level that we need to support the budgets of the Middle East countries.

We don't wanna go but they've had to increase or spending to support the social programs that resulted from the Arab Spring but just generally -- today you guys are seeing strong flows largely because of -- -- -- -- Why are you gonna.

Why -- in the government bonds and one and a half percent well you know clearly you know the the even though the Fed is fixed extended beyond time -- when rates will stay low.

We know at some point that party's gonna end him -- -- fixed income rates start to rise pure fiction come investments are going to suffer.

You know what we focus on our dividend growth and our -- -- ten years is a love and half percent growth in dividend income.

About twice that of the S&P 500.

Growth well looking at that though because people expect some.

Element of safety buying a dividend paying stock is supposed to give you cushion but if you look at the last five years.

Some of the biggest blow up to Ben and your biggest dividend payers and financial stocks -- -- I would point now that want to point out JPMorgan is.

-- most recently one of your top holdings so what do you say to people about did it looks like dividends don't really alleviate any risk at all.

Well -- financial crisis I think is an exception.

But by and large if you combine that the safety that a dividend instills in the the discipline as a dividend stills and -- management's.

You combine that with looking at some balance sheets keep your debt to cap.

While low looking at low costs -- production.

Then you have a portfolio that's not gonna fall as much when you get into the rough patches of the economy.

In particular -- JPMorgan if you speak to this but do you do you look at and say with you go through.

The period like they -- and management's question is that still the type of company you wanna -- into about selling.

Now we're still holding -- you know the size of JPMorgan is.

If you more than enough that they had -- bought porno and bought a company and have this type of loss I don't think anyone will be talking about it -- -- that they are known as the credit leader.

That I think it's kind of given them -- black -- But we -- is one of the reasons we are underweight financials overall and our portfolio because there isn't the transparency into those company's web.

Out dividend payouts from companies do expect companies to be spending their cash more and more given it back to shareholders and that way.

Well you know as -- -- we're seeing good dividend growth this year we've had 55 of our 112 holdings already increased dividends and were up 16% on our PL year to date -- so we are seeing that pay out now.

You know we'll have to see what happens with the expiration of the preferential treatment of dividends which will expire -- -- thirteenth.

But most of the companies we talked to get paid dividends before that prefer preferential treatments -- -- and we expect on the continue even after Erica.

Good to see Bob thank you thank you it's come back body hair from BlackRock on the bank account.

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