Most dividend growth investors like to own stocks
with low price volatility, because then you are less likely to become emotional about the stock.
As consumer demands shift, fair treatment of employees (which boosts productivity), green off - the - grid energy sources (
which lower price volatility), and sustainable sourcing (which reduces supply - chain and political risk) isn't profit - killing idealism.
While beta is backwards - looking (i.e. a stock with
low price volatility historically will not necessarily have low volatility going forward), it is still helpful for investors to understand since we each have different risk tolerances and emotional tendencies.
For instance, historically, you could have notched surprisingly good results by favoring securities characterized
by lower price volatility, higher yields and higher quality (as reflected in, say, higher gross profitability or lower debt).
When comparing between stocks paying different yields, evidence from Fama - French data shows that higher yields do NOT result
in lower price volatility.
Securities which demonstrate sufficiently high liquidity and
low price volatility based on meeting specific price risk and liquidity risk measures.
Some things I like about this company are its low dividend payout ratio (37 %), low beta (0.86,
meaning low price volatility), and its good balance sheet.
An above - average dividend yield (the MSCI Canada Energy Index is yielding an annualized dividend of 3.6 % versus 2.9 % on the overall MSCI Canada index, according to Bloomberg data as of July 31, 2017) and
lower price volatility could make energy a more attractive sector for income - seeking investors in a low yield world.
Due to
the lower price volatility of the Australian market during the past seven years, whether measured on local - currency or common - currency terms, the Australian market has outperformed the US market on a risk - adjusted basis.
Therefore, they might choose to focus on stocks that pay greater dividends and have
lower price volatility.
•
Low price volatility and declining share count.
Which should
lower the price volatility and the difference in bid ask prices.
Compared to other equity income products, such as REITs and MLP ETPs, high - dividend equity ETPs tend to have less sector concentration risk and
lower price volatility.