Blue Chip Equity Income Fund

At Hodges Capital Management (HCM), we manage six distinct fund strategies consisting of domestic publically traded companies. We believe these strategies cover all the different areas of investing that a client would need, ranging from small and mid-cap stocks to large cap and blue chip companies. We are based here in Dallas and have been serving our clients since 1989. Hodges Capital relies on in-house research through extensive company analysis and contacting management teams directly. Being family and employee owned, we take certain pride in caring for our customers because we are investors as well.

One area we see opportunity is income investing that comes from the dividends of large blue chip companies. Launched in September 2009, the Hodges Blue Chip Equity Income Fund (HDPBX) addressed this opportunity. We are investing in what we see as the best companies in the United State of America. In addition to the dividend yield, you get the added benefit of potential appreciation of the companies’ stock price over time.

These are large companies that pay a dividend. More importantly, we want these stocks to grow their cash flow, increasing earnings, and raise their dividend each year. A bonus would be if they repurchase shares. Overall, we love to see companies returning cash to shareholders in the form of dividends and repurchased stock.

At Hodges Capital, we are bottom-up investors. We look hard at company management teams and the financial health of their companies. We like stocks yielding 2 to 3% and exhibiting steady growth. We target market leaders with strong total returns including the strongest companies in healthcare, consumer goods, and industrial products.

At Hodges Capital, we have a positive market outlook and think investors can sometimes get negative on the market because of short term financial news. We believe the current market is attractive, especially in this very low interest rate environment. While we never try to predict things like interest rates, we will invest in opportunities current rates are providing.

There are many blue chip stocks that we cover and research. Evaluating the balance sheets and monitoring debt levels will usually serve investors well over time. Industries that are hard to get into are particularly of interest to our research efforts. We look for companies that are growing organically and not dependant on the capital markets to raise money for their growth every few years.

Companies that fall into these categories are included in the Hodges Blue Chip Equity Income Fund (HDPBX). For information, please go to