This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Fund Proves It Pays to Support Shareholders

Stocks in this article: CHDCPNSRGY

TEQUESTA, Fla. ( TheStreet) -- Companies such as Church & Dwight (CHD) and Colgate Palmolive (CP), which pay dividends and limit executive compensation, have outperformed the S&P 500 Index over the past year.

That strategy has helped the Mirzam Capital Appreciation Fund (MIRZX), which buys shares of companies that follow so-called best practices.

The mutual fund, co-managed by Albert Meyer, has risen 27% over 12 months, beating the S&P 500's 22% gain. Mirzam Capital Appreciation is up 3.6% in the past month, while the benchmark index is little changed.

More than 99% of the Mirzam fund's holdings pay a portion of their free cash flow in the form of dividends. Meyer prefers established companies with long track records and evidence of shareholder support. Mirzam Capital Appreciation's largest positions are Teva Pharmaceutical (TEVA), Huntington Money Market Fund and Ship Finance International (SFL).

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

Why is CEO pay an important part of your stock-selection process?

Meyer: The whole corporate culture is expressed by executive compensation. The more emphasis a company puts on executive compensation, the less emphasis on shareholder returns. So we look closely at corporate governance, and we focus on the stock-based compensation part of CEO compensation.

Why are you a big fan of Church & Dwight?

Meyer: Church & Dwight owns some valuable brands that are used in households that are based off their Arm & Hammer baking soda brand. The company pays a nice dividend and has a nice net margin, disciplined executive compensation and shareholder capital allocation. It's just a great company. It's performed extremely well over the past few decades, and the company has been around since 1846.

Another big-brand company you're high on is Colgate.

Meyer: Colgate also has been around for more than 100 years. It dominates or has a very large market share in toothpaste and toothbrushes. Colgate also has other consumer products used in homes. The company has a high net margin and a very high return on capital. It takes its dividends seriously and buys back stock. No stock option problems there as well.

Richie Brothers Auctioneers (RBA) seems like an off-the-beaten-track stock.

Meyer: Richie Brothers Auctioneers is a Canadian company but has facilities globally. It auctions industrial and mining equipment. It's a very transparent business model with wide profit margins. The company has a large competitive advantage. It's a terrific company.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs