The Wall Street Transcript

 TWST – The Wall Street Transcript (March 5, 2023) Read the Transcript Here (Subscription Required)
 Selecting Securities to Own for the Long Term – Balancing Dividend Growth and Earnings Growth to Produce Solid Returns 



Michael Shelton

Michael Shelton, Senior Vice President, Portfolio Manager with Nicholas Funds discusses investing in dividend paying stocks for the long term. He provides insight into his investment process which attempts to balance consistent dividend growth with earnings growth in an effort to produce more consistent returns over time. Michael has 27 years of experience analyzing and investing in companies, including 17 years with Nicholas.

“There are several reasons why owning stocks that pay dividends is important and beneficial to long-term performance and stability. Historically, dividends have accounted for a significant percent of total return. Since 1930, dividends have accounted for over 40% of total returns earned by common stocks.”

“Security selection is the keystone to providing superior investment returns over time.”

Nicholas’ security selection process is based on identifying key characteristics we feel are critical to the long-term success of investments.

  • A competitive dividend yield supported by earnings growth and increasing dividend rates. •
  • A payout ratio less than 70% of earnings. • A history of consistent, sustainable revenue and earnings growth.
  • Own an enduring product or service with a strategic position within their industry.
  • An identifiable moat to protect and enhance market share.
  • Manageable balance sheets and debt service.
  • Ability to generate free cash flow to reinvest or return capital to investors.
  • Proven management teams with interests aligned with shareholders. 
  • Stocks offering potential capital appreciation relative to historical valuations and earnings growth potential.

Read the Transcript at (Subscription required)

Important Disclosure Information

Click here for the fund’s quarter-end and month-end performance.

The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contain this and other important information about the investment company, and may be obtained by visiting or by calling 800-544-6547. Read it carefully before investing.

Diversification does not assure a profit or protect against loss in a declining market. There is no guarantee that distributions will be made.

Fund holdings and sector allocations are subject to change. The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Nicholas Company, Inc. as of the date written and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

There can be no assurance that companies that currently pay a dividend will do so in the future.

Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. Prospective investors should consult their financial and tax adviser before making investments in order to determine whether an investment will be suitable for them. This is not an offer for any mutual fund mentioned other than Nicholas Equity Income Fund, Inc.

Mutual fund investing involves risk. Principal loss is possible. Investing in small and medium sized companies involves greater risks than those associated with investing in large company stocks, such as business risk, stock price fluctuations and liquidity. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer term debt securities such as limited liquidity and greater volatility. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss of principal and interest than higher-rated securities. The Fund may invest in REIT's and other Real Estate Securities which involve additional risks related to the real estate industry. The performance of these securities is dependent on the types and locations of the properties owned by the entities issuing the securities and how well the properties are managed.

Contact Us

Click Here

The Nicholas Funds are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of any Nicholas Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. 

Please refer to each prospectus for important information about each investment company, including investment objectives, risks, charges and expenses. 

Mutual fund investing involves risk; principal loss is possible. Small- and medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment by the Funds in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. 

Past performance does not guarantee future results.

Diversification does not assure a profit nor protect against loss in a declining market.

Glossary of terms   |   Privacy & Security   |   Accessibility Statement

Nicholas Funds are distributed by Quasar Distributors, LLC

return to top