According to Ross Mathison, deputy manager at The Scottish American Investment Company, finding the best dividend-paying stocks requires research, patience, and timing
Income is not guaranteed, and capital is at risk.
Patience is not only a virtue but also a strategy in the world of investing. The Scottish American Investment Company (SAINTS) works to implement this strategy, transforming market challenges that even the most successful businesses face into opportunities. According to SAINTS deputy manager Ross Mathison, finding the top dividend payers takes a sharp eye, composure, and the discernment to see value in the midst of volatility.
Take the example of LOral, the massive French cosmetics company. Many investors fled when its shares fell 20% in 2024, mostly as a result of concerns about a slowdown in China's luxury spending. But the short-term turbulence was not visible to SAINTS. "The slowdown did not seem to us to be a sign of a significant shift. We saw it as a unique chance to acquire a fantastic company at a reasonable cost," Mathison says.
Seek out more than well-crafted presentations.
Deep, in-depth research is the foundation of this strategy, which goes beyond simple contrarianism. Profit-and-loss statements and well-designed investor presentations are only the tip of the iceberg for SAINTS. It goes deeper, frequently speaking with industry experts and former workers. This thoroughness exposed the entrepreneurial culture and advancements in "beauty tech" of Loral, which are elements that contribute to its resilience to setbacks.
Furthermore, Loral is not a unique instance. SAINTS employs this methodical, research-based approach throughout its entire portfolio. Consider Anta Sports, the biggest domestic sportswear brand in China. SAINTS is not alarmed by the recent declines in sales of high-end products in China. "We give Anta's core strengths more consideration. According to Mathison, these will have a greater impact on long-term returns.
Similar to this, Schneider Electric, a French company that specializes in power supply and management, has survived a period of regulatory difficulties and leadership changes. However, Schneider's dominant position in the global electrification trend and the prospect of playing a key role in the AI-driven data center boom are more significant to SAINTS.
Long-term profits are driven by core strengths.
It is no coincidence that SAINTS offers a wide range of products, including electrical equipment, sportswear, and cosmetics. "We take time to get to know and trust to stay on course despite bumps in the road," says Mathison, describing the carefully chosen group of "great growth businesses." For more than 50 years, this strategy has allowed SAINTS to raise its dividends to shareholders annually.
The SAINTS strategy is straightforward: from a global pool of 5,000 companies, select 50 to 60 of the top dividend-paying companies, with an emphasis on those that can generate earnings and dividend growth of at least 10 percent annually for ten years or longer. It has nothing to do with following short-term gains or market timing. It's about identifying the core advantages that propel long-term profits instead.
An alternative to hectic markets that is patient.
In a world where everyone is obsessed with daily stock movements and quarterly results, SAINTS provides something unique. It serves as a reminder that the best businesses are able to not only weather storms but also come out stronger from them, and that the best opportunities frequently present themselves when others are afraid.
A compelling alternative to the hectic pace of contemporary markets, this methodical, research-based approach offers investors consistent, long-term growth and dependable dividends. As Mathison summarizes, "We question whether our core thesis has changed when those inevitable hiccups occur. No, then our opportunity lies in the short-termism of the market.
The SAINTS philosophy ultimately comes down to one straightforward but impactful notion: it is worthwhile to wait for opportunities to invest in rapidly expanding businesses. In situations where others perceive only risk, patient investors can find value by focusing on the company's core strengths and ignoring short-term shortcomings.
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