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Nancy Tengler: Veteran Dividend Investor Identifies Current Investment Opportunities

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Dividend investing is a key part of Nancy Tengler’s 40+ year career, with a focus on relative dividend yield. She believes that companies set dividends based on long-term earnings power, providing insight into management’s view. For example, Walmart’s recent 9% dividend increase indicated strong potential earnings growth, leading Tengler to add to her holdings. She prefers income-paying stocks as a hedge against inflation, emphasizing the power of compounding dividends.

Tengler avoids the highest-yielding dividend stocks, as these may signal issues or potential dividend cuts. Instead, she looks to the second and third deciles, which historically perform better. Some of her top picks include companies like Walmart, which has embraced technology and upgraded its stores, and American Express, which has seen strong growth with younger consumers. Carrier Global, focused on climate and energy solutions, is poised to benefit from the AI wave as data centers expand.

Alphabet, a recent addition to Tengler’s income portfolio, authorized its first-ever dividend in April. Despite lacking a history of dividend growth, Tengler believes the tech giant has the potential to grow payouts in the future. She sees Alphabet as undervalued and well-positioned for growth, with a focus on cost control and business rationalization. These investments reflect Tengler’s strategy of seeking out old economy companies pivoting towards technology and innovation.

By analyzing a company’s dividend growth and relative yield, Tengler aims to capitalize on long-term earnings power and compounding dividends. She emphasizes the importance of dividends as a core strategy in every portfolio, offering protection against inflation and potential stock price declines. Through careful selection and a focus on companies embracing innovation, Tengler has identified strong performers like Walmart, American Express, Carrier Global, and Alphabet, which offer growth potential and stable dividend payouts.

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