Investment Philosophy

"The most powerful force in the universe is compound interest"
-Albert Einstein

Hamlin's strategy is to compound income at high rates, recognizing that such compounding is a potent force of growth. Concurrently, Hamlin seeks to provide clients with long-term growth and ample access to cash. Asset classes that allow us to achieve this strategy include high yield municipal bonds and high dividend-paying equities.

Equity Management

We require a cash return on client dollars invested. We believe that a healthy and consistent dividend policy enhances investor total return, endorses historic accounting statements, and acts as an effective governor on capital allocation. We focus on stocks with dividend yields at least 50% above the S&P500 index yield. Within this high income universe, we search for companies with low debt, ample free cash flow and high returns on equity.

Candidates for purchase must have a history of increasing dividends and current company management must be committed to a generous dividend policy. We are dedicated to rigorous financial statement analysis, focusing on our companies’ true quality of earnings and capacity to cover an increasing dividend payment. While our strong balance sheet and dividend discipline generates mostly large company holdings, we invest in all capitalizations. We are particularly interested in high dividend-yielding stocks with strong balance sheets that are under-followed by other managers and Wall Street analysts.

Fixed Income Management

Hamlin specializes in the management of nonrated, tax-exempt high-yield fixed income securities. These municipal bonds finance essential services across the country and include correctional facilities, charter schools and senior living facilities. We believe these projects offer solutions to pressing national challenges such as increasing incarceration rates, an inadequate national education system, and the aging of Baby Boomers.

In our opinion “nonrated” does not imply credit unworthiness. In many cases these projects are too small to be rated and may not be able to bare the significant fees nor the obligatory six-months time period to engage a rating agency. Additionally, the Hamlin Fixed Income Team conducts its own research and does not feel the need to rely on a credit rating report. Our research and due diligence process involves thorough local market supply/demand analysis, leverage and coverage analysis, extensive legal due diligence, regular tours of facilities, conference calls with management and continuous operational and financial review. We seek to purchase a controlling stake in these projects, structuring transactions with provisions that are favorable to our clients. Our bonds are backed by first mortgages on property, plant, and equipment and are further secured by pledges of gross revenue, restrictive covenants, and other attractive provisions. Furthermore, we work alongside the facility managers and obligors to help de-leverage their balance sheets and improve their creditworthiness.

Hamlin's track record reflects our rigorous credit analysis, innovative risk mitigation strategies and active portfolio management. We do not predict interest rates nor do we use leverage. Our bonds typically yield 2.5% above AAA municipal bonds, allowing client portfolios to compound at higher rates of interest. The tax-exempt status enables interest to compound free of federal income tax. Over time our bond portfolios have shown fixed income cash flow stability with equity like total returns.

Please refer to the important disclosures found on Hamlin's disclaimer page with regard to the risks inherent in Hamlin's investment strategy.