Welcome to Extreme Investor Network, where we provide unique insights and strategies to help you make the most out of your investments. Today, we are diving into the world of dividend investing with Nancy Tengler, a seasoned investor with over 40 years of experience.
Nancy’s approach to dividend investing goes beyond simply picking stocks that are growing their dividends. She analyzes the relative dividend yield of a stock, comparing it to its own historical yield and the market. According to Nancy, this approach provides valuable insight into the company’s long-term earnings potential and management’s confidence in the business.
One example that highlights the power of dividend growth is Walmart. In February, Walmart announced a 9% dividend increase, signaling strong potential earnings growth. Nancy, who already owned shares of Walmart, saw this as a positive sign and added to her holdings. As a result, Walmart’s stock price has surged over 33% in the past year.
But why is dividend investing so important? According to Nancy, income-paying stocks act as a hedge against inflation and offer the potential for long-term growth through compounding dividends. Additionally, if a company’s stock price drops, investors are still being paid to wait for a turnaround.
When it comes to selecting dividend stocks, Nancy suggests avoiding the highest-yielding decile, as these stocks often come with higher risk. Instead, she focuses on the second and third deciles, which historically perform better.
Some of Nancy’s top dividend picks include companies that have successfully pivoted to embrace new technologies. For instance, Walmart has invested in digitization, AI, and e-commerce, while American Express is using artificial intelligence to improve fraud detection and attract younger consumers.
Carrier Global, a climate and energy solutions company, is another favorite of Nancy’s. With a rapidly growing dividend and a strong position in the AI market, Carrier Global is poised for future growth.
Finally, Nancy recently added Alphabet to her income portfolio. While Alphabet is relatively new to dividend payments, Nancy sees potential for growth in the tech giant’s payouts as the company continues to evolve and improve its business operations.
At Extreme Investor Network, we believe in providing our members with exclusive insights and strategies to help them succeed in the world of investing. Stay tuned for more expert advice and recommendations to help you maximize your investment potential.