Baillie Gifford
Compounding isn ’ t the only way to outperform , but it ’ s a way that works
new markets for their products . We call them ‘ adjacency growers ’. Swedish industrial giant Atlas Copco is a classic example . Originally a maker of compressors , it used its engineering expertise and customer base to launch attacks on the power tools market and , more recently , vacuum pumps . Companies that commit to paying growing dividends usually have a proven business model , strong defences against competitors , steady earnings and cashflow , good habits of reinvestment and the kind of growth that generates lots of spare cash . Compounding isn ’ t the only way to outperform , but it ’ s a way that works .
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Issue 91 - January 2023 / 21 /