Ticker: EPSYX
Assets: $1 billion
Year-to-date return: 4.5%
World stock average: -5.4%
What they like now: Nestlé
Its 3.6% dividend yield, robust cash-flow growth, and shrinking debt make the food giant a core holding for the fund.
Every week begins the same way for 49-year-old Eric Sappenfield. At 7:30 a.m. on Monday, a computer in his New York office sorts through 14,000 stocks around the globe, analyzing their dividends and cash flow. Sappenfield and his co-managers then sift through the 200 or so companies that pass the screen, searching for a handful that they believe will produce a 9% annual return. This year the fund's top performers included high-yielding tobacco companies Lorillard and Reynolds American, long-term holdings that they increased in the first quarter. The managers also invested in Williams Partners, a natural-gas master limited partnership, which had risen 31% this year through November.
Times are uncertain. Reliability and income matter more than ever. These undervalued names offer stability.
