We remain cautiously optimistic

Key takeaways:

• Dividend trends have exceeded expectations so far this year, driven by a stronger-than-expected recovery in profits and margins. Though dividends have risen across the board, the biggest increases have come from the energy and financial companies.
• Despite the market volatility, HINT has held up relatively well, driven by energy holdings which have benefitted from higher oil and gas prices. Holdings within defensive sectors such as consumer staples, telecommunications, and pharmaceuticals also contributed positively.
• The economic outlook has worsened since the beginning of the year. However, we think that dividend paying stocks with low valuations relative to the market, strong cash flows and conservative balance sheets should be well placed to weather this environment.