Labor Market Pays Dividends

Despite the weak March NFP number, labor markets are coming to a boil. A look into the KC Fed's Labor Market Conditions Index reveals an expanding labor force, record job openings, accelerating hiring, declining unemployment and high levels of labor market confidence. The latest read shows activity trending at 10 year highs with momentum at an all time high, no reason to expect deterioration here. You can read more about this in my article, The Jobs Report Isn't Telling The Whole Story.
source; KC Fed LMCI

While good for the economy, the full effects of improving labor conditions have yet to be felt. Consumer spending, while positive, has yet to really take off, and economic growth remains anemic. This does not mean there are no opportunities. One sector that has been supported by labor trends, and will continue to be so, is labor market services; or businesses that aid employers and employees.
When looking for the best place to invest I look at a couple of factors. The first and foremost is the fundamental outlook which, in this case, is quite bullish. After that, I stick with well established businesses with a track record of successful operations. To narrow the field I then look to valuation, distribution/yield, growth and price. And lastly, I look for those that are in a dividend hiking cycle, or that have recently hiked their distributions.
In this case, the sector can be divided into sub-sectors which may affect final decision making. Trends within... Read more