Posted on: June 18, 2012

The Dragon of Dividends

Investor and TV host Kevin O’Leary likes to tell how his investment strategy derives from his mother’s preference for safe stocks that pay dividends.

“She’d say the same thing every week when she got paid,” said O’Leary at a presentation in Victoria June 12 sponsored by Alitis Investment Counsel. “She’d say: never spend the principle – just the interest – and never buy a security that doesn‘t pay a dividend.”

O’Leary believes in that principle so strongly that when he couldn’t get existing funds to adhere to his dividend directive, he decided to form his own company with that simple rule. The O’Leary Funds now have more than 20 funds, each of them adhering to the dividend-only rule.

Dividends only for this dragon

“Think of executives at a company that has to pay you up to 30 per cent of their cash each quarter for your dividend. They have to think every day about where that money is coming from,” said the man Alitis President and CEO Cecil Baldry-White calls “a genetically-coded entrepreneur.”

Canadians are familiar with O’Leary’s success because of his lengthy television pedigree. He is co-host with journalist Amanda Lang on The Lang and O’Leary Exchange on CBC News Network. He is one of the venture capitalists on Dragons’ Den and host of Redemption Inc., both of which air on CBC Television. O’Leary is also a “shark” on the U.S. version of Dragons’ Den, Shark Tank, which airs on ABC. “People always ask me ‘if you’re an investor, why do you spend so much time on television – are you a narcissist?’ In fact, television makes me a better investor,” he said.

Click here to continue reading the full article at the Victoria Foundation.

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  • Sounds good me to. I bought my first dividend stock back in 1988. I wish I had known the concept of dividend growth investing back then. Nevertheless, I only buy stocks that pay dividends and have a solid portfolio. The aim, of course is to have my dividends cover most or all of my monthly expenses. Great advice from your mother. Something I truly follow as well.

  • Asharf A Jamal

    Kevin o’Leary advises better than Cramer…
    Like to see the holding Kevin has, also like to know the other stocks he is talking about