My name is Brian Bollinger, and I am the President of Simply Safe Dividends. Prior to starting the company, I was an equity research analyst for a multi-billion dollar investment fund. I really enjoyed my work and have spent over 10,000 hours researching, analyzing, and recommending stock ideas.
From calling up management teams to digging through annual reports, my research experiences have exposed me to many different types of industries, companies, and investment situations. I am also a registered Certified Public Accountant, which has helped me better analyze financial statements and get to the bottom of some of the more dreadful accounting issues, such as deferred taxes.
Prior to joining the investment management industry, I attended school at Indiana University, where I triple majored in finance, accounting, and entrepreneurship and was fortunate to graduate in the top 1% of my class. At graduation, I also received the William A. Rawles Key Award, which is presented annually to the single senior in the school of business having the most distinguished record in the undergraduate program.
Work experience and education aside, I am a straight shooter. I believe in only providing stock analysis that is rooted in the facts and offers a balanced look at the pros and cons of a particular investment opportunity. You will never find gimmicky analysis, sensational headlines, or careless recommendations at Simply Safe Dividends. Everything we do is done with integrity.
Our Investment Philosophy
Boring and conservative are two words that I would use to describe our investment philosophy. Simply put, our dividend portfolios invest in outstanding businesses that are trading at reasonable prices. We only invest in companies and industries that are inside of our circle of competence, which isn’t very large. If we cannot quickly understand how a business makes money, we move on – there are too many fish in the sea. If I had to guess, well over half of the listed companies in the U.S. are “too hard” for us because of their inherent complexities or dependence on complicated macroeconomic factors that are outside of their control (e.g. the price of steel). The good news is, we only need to find a few dozen stocks to build a high quality dividend portfolio.
Once we have identified a business that we can understand well, our fundamental diligence process begins. At this stage, we want to know everything we can about the company’s history and the various drivers impacting its profitability and growth. We will review past annual reports, read conference call transcripts, research competitors, watch YouTube videos, and do anything else to better understand a company’s economic moat. We are looking for businesses with long-standing operating histories that have withstood the test of time. The longer a company has been in business doing the same thing, the better. Many of our favorite businesses have been around for well over 100 years. Operating in a slow-changing industry as a market leader is often a great position to be in, and these types of companies almost always get our attention.
If we can get comfortable with a company’s competitive advantages and the pace of change in its industry, we will review its financials. Not surprisingly, we like companies that earn a high return on invested capital, maintain conservative balance sheets, have numerous opportunities for earnings growth, generate consistent free cash flow, maintain healthy payout ratios, and are committed to reasonable dividend growth. Importantly, our dividend investments are focused on generating safe income, preserving capital, and maximizing total return in a responsible manner. While our dividend portfolios are characterized by above-average dividend yields, we do not chase yield.
When we make an investment, we take a patient, long term investment horizon and expect to hold the stock for at least five years, keeping portfolio turnover low. Generally speaking, we will sell a stock for one of four reasons: (1) the safety of the dividend payment has come into question due to unexpected fundamental weakness; (2) the company’s long term earnings power appears to have become impaired as a result of new competition, secular changes, etc; (3) the stock’s valuation reaches seemingly excessive levels; or (4) we have a new stock idea with a more attractive valuation and fundamental outlook.
Otherwise, we are more than happy to hold onto high quality dividend growth companies forever. Like Warren Buffett said in his 2012 shareholder letter when he quoted Mae West, “Too much of a good thing can be wonderful.”