Equity Income Investing

Expert Livestream, 14:00 UK time, 29 March The Specialist Fields: Epoch Investment Partners: Why capital allocation matters Guinness Asset Management: Why quality matters --- IAN MORTIMER, Portfolio Manager, Guinness Asset Management on Why Quality Matters: The approach: to invest in good quality businesses with persistently high returns on capital and strong balance sheets, that are highly cash generative, and that are trading at attractive valuations. Such businesses are best placed to pay a sustainable and growing dividend in the future. A balanced approach – seeking a return from a combination of cash flow growth, multiple expansion, and dividends – alongside a focus on quality characteristics puts the investor in a good position whatever the future market direction in 2021 and beyond. --- JOHN TOBIN, Portfolio Manager, Epoch Investment Partners explains why Capital Allocation is Key. A company should reinvest capital if the expected return on invested capital is greater than the company’s cost of capital. Remaining free cash flow should be returned to shareholders via shareholder yield. Capital allocation matters, because decisions on how to allocate cash flows – whether to reinvest in order to grow a company, or to return capital to shareholders – can create or destroy long-term shareholder value.