Investment Objective
The Nicholas Equity Income Fund, Inc. seeks to provide investors with a reasonable stream of income. Its secondary purpose is to provide moderate long-term growth of capital. The Fund pursues its objective by investing primarily in dividend-paying stocks.

Investment Policies & Considerations
Historically, dividends paid by companies to their shareholders have accounted for almost half of the total returns earned by common stocks. This has made dividend-paying stocks an attractive way to provide investors with superior total return.

Our policy is to invest primarily in income producing securities, such as common stocks, preferred stocks, and convertible securities. We will generally select securities with dividend yields that are expected to be higher than the current dividend yield of the S&P 500.

• Combined growth rate and dividend yield of 10% or better
• Consistent earnings
• Return on equity (ROE) of 15%, or an improving ROE
• Debt to total capitalization of less than 50%
• A price to earnings ratio lower than two times the growth rate
• An enduring franchise or brand
• Honest, capable management
• Significant management ownership of stock
• Long-term and short-term business momentum

This portfolio may include investment grade and non-investment grade, as well as rated and non-rated securities. Our manager and analysts perform in-depth credit analysis to determine which investments are appropriate for the Fund. Our analysis considers the issuer’s financial resources, sensitivity to economic trends and conditions, operating history, management, and other factors. Securities must be in the upper tier of the lower-rated category to be considered. In general:

• We do not attempt to predict interest rate movements.
• We hold bonds with short to intermediate maturities in order to improve portfolio stability while pursuing competitive returns.
  

Mutual fund investing involves risk: loss of principal is possible.

The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. 

Price to earnings ratio is common tool for comparing the prices of different common stocks and is calculated by dividing the current market price of a stock by the earnings per share.