Harnessing Dividends for Growth & Impact in a Changing Market

In the world of growth focused investing, companies that pay a dividend are often overlooked. For those seeking passive income and long-term wealth creation, investing in portfolios of stocks that pay dividends can be a game-changer, especially when paired with a growth strategy.

At Nia Impact Capital we take our impact approach to investing and intersect it with the power of dividends to bring you the Nia Growth and Dividend Portfolio. This product includes 50-65 global companies across the capitalization spectrum. All companies selected for this portfolio derive their revenues from one or more of Nia’s Six Solutions themes, all include diversity in leadership, and each company pays an annual dividend.

In our February Wednesday Wisdom Webinar we interviewed Marc Lichtenfeld, the author of Get Rich With Dividends: A Proven System for Earning Double-Digit Returns. The book achieved best-seller status shortly after its release in 2012 and is now available in its 3rd edition. Get Rich With Dividends was named Book of the Year by the Institute for Financial Literacy.

We spoke to Marc to explore and highlight the benefits of including dividend investing, particularly during volatile and changing markets.

The Journey to Dividend Investing

As Marc shared in our recent webinar, his journey into dividend investing began in the late 1990s during the dot-com boom and subsequent crash. The market collapse prompted a wake-up call—companies with little to no revenue and questionable business models saw their stocks skyrocket, only to come crashing down quickly thereafter.

This experience highlighted the importance of investing in businesses with strong fundamentals, consistent cash flow, and a commitment to rewarding shareholders. That’s where dividend-paying companies stand out.

Why Do Companies Pay Dividends?

A company that pays a dividend is typically one that generates steady cash flow and has excess capital after reinvesting in its growth. Instead of hoarding cash or engaging in stock buybacks, these companies choose to return a portion of their profits to shareholders in the form of regular dividend payments.

Dividend payments can provide a reliable income stream, and when reinvested, they compound over time, significantly increasing an investor’s total return over time.

The Key Benefits of Dividend Investing

Marc shared 4 reasons why he is an advocate of an investing strategy that includes dividends. We at Nia are also strong advocates:

1. Downside Protection in Market Corrections

Dividend-paying stocks are often more stable, especially during bear markets or economic downturns. Companies with strong cash flows and established business models tend to weather market volatility better, making them a safer investment choice.

2. Passive Income Can Help Build Wealth

Receiving regular dividend payments allows investors to earn income without selling their shares. Over time, reinvesting dividends can lead to exponential growth, a concept known as compounding.

3. Long-Term Growth Potential

Dividend-paying companies are known for being more stable and somewhat less volatile than non dividend paying companies ; and yet, not as commonly known, many also experience strong price appreciation. Some investors mistakenly assume dividend stocks are boring and not sexy, yet history, and Nia portfolios show otherwise.

4. A Strategy for Generational Wealth

One of the most powerful aspects of investing in portfolios of dividend paying companies is the potential to change lives across generations. Many long-term dividend investors have seen their portfolios grow substantially over the years, enabling them to pass on wealth and investing knowledge to their children and grandchildren. Teaching younger generations to invest in quality portfolios of dividend paying stocks can set them up for financial security for decades to come.

The Unique Nia Approach to Dividend Investing

At Nia we offer an investment product that brings together the benefits of sustainably focused investing with a strong dividend strategy. The Nia Growth and Dividend Portfolio is similar in construction to our flagship Nia Global Solutions strategy in that all of the companies selected derive their revenues from one or more of Nia’s six solutions themes, all of the companies include diversity in leadership, with the added criteria that all companies in this strategy pay a consistent dividend. The companies included in this portfolio are forward looking, driving toward a sustainable and lower carbon emission economy.

A component of our selection process for the Nia Growth and Dividend Portfolio, after looking for revenues from our solutions themes, and a strong dividend payout, is to include women in leadership positions on the executive team, as well as on the board of directors.

By design we’ve constructed a portfolio with much lower carbon emission intensity than a standard index, seen here compared to the SPGM.

To learn more information on this portfolio, please refer to our factsheet or contact us.

Final Thoughts

At Nia, dividend investing isn’t just about earning passive income—it’s about investing in a portfolio that can withstand market turbulence while steadily growing in value. Whether you’re looking for stability, long-term wealth creation, or a way to sleep better at night because your money is investing in companies doing good for the world, the Nia Growth and Dividend portfolio offers a compelling solution.

At Nia, we remain committed to identifying high-quality, dividend-paying companies that offer both growth potential and solutions-focused products and services. As markets and our economy evolve, one thing remains constant: the power of dividends as part of a diversified portfolio strategy.

Important Disclosure:

The views presented here are those of Nia Impact Capital (“Nia”) and these views may be subject to change. All information is obtained from sources believed to be reliable, yet Nia does not certify the accuracy or completeness of this information.This article does not constitute an offer to sell, or the solicitation of any offer to buy any security. All investments carry risk. An investor is strongly advised to consult with their investment professionals prior to making investments to ensure that they understand any associated risks.