Jenny Harrington - Dividend Investing, Risk Management, and Building Reliable Income Streams
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Welcome to a new edition of the Value Investing with Legends podcast. My name is Michael Mobison and I'm an adjunct professor at Columbia Business School and a faculty member at the Heilburn Center for Gramma Dot Investing. I'm here with my co-host, Tano Santos, the Robert Heilbronn Professor of Asset Management and Finance at Columbia Business School and the faculty director at the Heilburn Center. Hi, Tano, how are you doing today? Doing great or whatever you said, Michael.
We teach that the value of a company is the present value of the cash the company can distribute to its shareholders over its life. However, we don't always dwell on how that happens, that is, the ways the company can enrich its owners. Our guest today is laser focused on the stocks of companies that pay meaningful dividends to their shareholders as a source of steady and reliable income. There is no doubt that receiving dividends every quarter can benefit shareholders financially, while providing them with peace of mind. Companies in the S<unk>P 500 paid out roughly $670 billion in 2025, and we know that dividends are less volatile than earnings or share buybacks.
The question is how to find those companies that are willing and able to provide that steady stream and to build a diversified portfolio to capture the benefits. Yeah, this is absolutely correct. That dividends is sometimes forgotten as that critical component of returns. We emphasize earnings growth rates of multiple expansion or compression, but that dividend yield can be a phenomenal source of returns and the reinvestment of those dividends can compound. dramatically to yield very good performance over the long run.
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