High-quality stocks that can pay a rising stream of dividends remain attractive.

ON NORTH AMERICA

Looking ahead in the US equity market, we feel that high-quality stocks with the ability to pay a rising stream of dividends remain attractive.

Many of the stocks we favour in our equity income portfolios continue to carry valuations at the lower end of their historical ranges, even though they currently offer a higher income stream than many fixed-income investments.  We see the potential for increased dividends being supported by strong balance sheets, with corporate America currently being very cash rich despite the difficult macroeconomic backdrop of recent years.  Free cashflow generation among US companies is also strong, with the free cash flow yield on the S&P 500 Index being about 8%. In  addition, we would note that...