November 15, 2017 8:15 am In August I decided not to add pawnbroking and lending group Hamp;T to the SIF portfolio. My reasoning was that it didn’t add much useful diversification. That may have been true. On the other hand, Hamp;T might have added some much-needed profit to the portfolio!
As often happens when I override my screening results, Hamp;T shares have risen since the end of August, thanks to strong trading and upgraded full-year guidance. So my mission this week is to make a final decision on this stock. Does it still offer the kind of value and growth potential I’m looking for?
A dividend debate
Before we look at Hamp;T, I’m going to take a quick diversion into my stock selection rules. I often think about how I might improve the screening rules I use to select stocks. And readers sometimes contribute suggestions too, for which I’m always grateful.
I generally prefer to invest in dividend-paying companies. I see dividends as a good discipline for management, and a useful indicator of profit and cash generation. But I’m well aware that many investors do well by focusing on capital gains and total returns, without worrying about yield.
I recently wondered…