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Procter And Gamble (PG) Increased Their Dividend For 56 Years In A Row According To Money Manager Of Dividend Growth Advisors

August 9, 2010 - The Wall Street Transcript has just published TWST Investing Strategies Report offering a timely review of the General Investing sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.

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THOMAS W.L. CAMERON, Chairman and Chief Investment Officer of Dividend Growth Advisors, LLC, is a respected money manager believed by many to be the first to focus on rising dividend investing - as early as the 1960s. He is currently co-portfolio manager of the Rising Dividend Growth Fund. His contributions have been noted frequently in the financial press. He began his investment career 1951, is Chairman of Cameron & Associates and has held senior positions with IJL/Wachovia, Hopper Soliday, and Sovereign Asset Management. He is Chairman of the Trustees Investment Fund of the Philadelphia Stock Exchange. Mr. Cameron served in the U.S. Navy during World War II. He is a cum laude graduate of Harvard University with an AB in American National Government and a graduate of Harvard Business School with an MBA.

TWST: Would you tell us about a couple of those in more detail and why you were attracted to them?

Mr. Cameron: Natural Resource Partners, owns coal assets, but they do not dig coal. They lease the mines to major coal mining companies. Because electricity produced with coal is so much cheaper to produce than with gas or oil, 37% of all energy in the world is generated using coal.7 We think the management of the company is excellent, and we think that the huge amount of coal now being used in China and in India will continue to increase both the demand for and the price of coal internationally. We are hopeful that NRP's profit results and distributions will continue to increase. LINN Energy is an oil and gas drilling limited liability corporation. Their objective is not to go out in the middle of the ocean or experiment with other risky prospects. Instead, they have large acreage and drill in areas where they get very high success rates.

TWST: What are some of the drawbacks to investing in energy MLPs? They're obviously doing so well and yet not everyone invests in them. Is it because they're not allowed to make huge profits?

Mr. Cameron: First of all, the percentage of investors who has even looked at these MLPs is, in our opinion, relatively small; however, the interest is increasing rapidly as many individual investors discover the high level of tax-deferred income associated with MLPs. We believe that the reason many institutional investors have not looked at MLPs is that the investment business, if we are right, now has a short-term, flash-trading oriented state of mind. There is a relatively small, in our opinion, segment of the investment industry that is focused on handling individual investment accounts. When I got into the investment business 58 years ago, most of the business was with individuals directing brokers to make trades for the portfolios that the clients held and managed. Today, most of the trading and portfolio management is done by brokers on behalf of clients. A lot of the emphasis of many of the big investment firms is to serve the clients that do the most trading rather than the people who buy and hold investments for a long period of time.

TWST: It's good that you bring up the proposed tax on dividends, because that will have an impact on a lot of investors who are looking for yield. What impact will it have on your particular firm?

Mr. Cameron: I have been in the business for many decades and we have been through several different tax levels, both up and down, during that period of time. People have always been interested in companies that pay dividends because it reflects an attitude by the management that they are rewarding the shareholders who have put in the money to build up their companies. One of the things that's interesting from my point of view is that we keep the dividend payout records of the companies we follow year-by-year during the ten-year periods that we have owned them and going all the way back to when they originally started consistently increasing their dividends. When you look at Procter & Gamble (PG), they've increased their dividend for 56 years in a row; Archer Daniels Midland (ADM) for 35 years in a row and so forth.10 We look closely at the last ten years in particular.

We saw that McDonald's (MCD) raised their dividend 50% in one year11, and when they did, we thought that they were enthusiastic about what was going on in their company that year, and what they thought they would be doing in the next several years. If not, they wouldn't have raised the dividend that much.The 10/10 Test for common stocks creates a universe of companies that have long term records of increasing dividends which in turn suggests earnings growth. Our research shows that 62 companies have raised their dividend for the past ten years at an average growth rate between 10% and 15%, 26 companies at a rate between 15% and 20%, and 25 at a rate greater than 20%.12 I believe that this is a fertile group of companies from which to build portfolios.

The remainder of this 17 page TWST Investing Strategies Report can be immediately viewed by purchasing online.


The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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