“Proven dividend growers can definitely help bolster returns when inflation is rising. In fact, nearly half of a market’s return comes from dividends,” she said. “So for me, companies with pricing power and growing dividends are very attractive in this market environment.”
Other long-term opportunities can be found in companies with strong innovation programs, she said, such as healthcare companies, where innovation is taking place both on the product side and the services side, but also where there are attractive valuations on real earnings and cash flow.
And in ESG, HVAC companies that are addressing the fact that 40% of greenhouse gasses are caused by buildings, and 40% of buildings’ energy use is deployed in heating and cooling, make good investments, she said. So do railroads, where “iron on iron is a lot more efficient than rubber on road. So a railroad can move one ton of freight 500 miles on just one gallon of fuel.”
As the global economy’s likelihood of recession rises, making plans for the future includes predicting where it will hit and how hard. One thing’s for sure, Lind said, and that’s where the U.S. goes, so goes everyone else.
“I think it’s fair to say that if we do get a U.S. recession, it will be very difficult for other economies around the world to decouple themselves away from that,” he said. “The U.S. tends to dictate the global financial cycle. So if the U.S. goes down, it’s going to drag the major European economies with it.”