Despite an uncertain economic market, Cincinnati-based investment counsel Bahl & Gaynor says the right approach leads to profits.

Bahl & Gaynor has current assets worth close to $7 billion, nearly $2 billion more than the firm reported in 2011.

According to portfolio manager Matt McCormick, the secret to the company's success is managing paid dividends "” the portion of a firm's profits paid out to shareholders. Managers at Bahl & Gaynor specialize in investing in stocks that pay dividends and regularly increase those dividends.

Smoother Ride

McCormick, a regular contributor on CNBC, Fox Business, and Bloomberg television programs, says dividends uniquely allow clients to preserve their capital in a difficult economic environment, giving investors a smoother ride when it comes to investing in blue chip companies like Procter & Gamble, which has increased its dividends for 56 years.

"In these unsure times more and more people are interested in getting paid to own a stock," he says. "There is likely to be more volatility in the market, not less, and it's going to be a grind-it-out economy for a number of years. Dividend-paying stocks do a very good job of providing steady income in volatile times."

Before the stock market crash of 2008, Bahl & Gaynor managed just over $2 billion in assets. Since the recession began, the firm has increased its assets more than 250 percent, almost exclusively a result of its expertise in handling dividends.


Dividend-paying stock is the trademark among Bahl & Gaynor portfolio managers — literally. Last year, the investment firm trademarked the phrase, "Dividends Paying Dividends."

"The trademark really puts our money where our mouth is," McCormick says. "It shows clients we are going to stick to our discipline, and if we do everything we can for them, everybody wins."

Bahl & Gaynor is unique as an investment firm because of its makeup. The 14 portfolio managers are also the collective owners, just the way founders Bill Bahl and Vere Gaynor envisioned when they established the firm in 1990.

"Bill and Vere were focused on dividends before dividends were cool," McCormick says. "As a firm, we've been doing it for over 22 years. Suddenly everybody else seems to have drank the dividend Kool-Aid."

In 2011, the founders sold an additional 29 percent of their equity in the firm to nine other portfolio managers, including McCormick. Bahl and Gaynor now collectively own 40 percent of the firm, while the other managers own 60 percent, setting up succession down the road.

Midwest Sensibility

Born and raised in Southwest Ohio, McCormick says Midwest sensibility plays a huge role in Bahl & Gaynor's past success and its future direction.

"We can compete favorably against companies many times our size because we know what we're made of," McCormick says.

"We're from Cincinnati and we have portfolio managers dedicated to staying in Cincinnati. We know what we are, and we know what we're not."

He maintains there is no special formula in terms of the approach going forward.

"If we stick to our knitting and continue to focus on the needs of our clients, good things will happen," he says, adding that it's critical the firm retains a realistic view of the market and the economy, while optimistic in its approach.

"If we keep doing what we've been doing for the last 22 years, the rest is gravy."