What is Div Growth?
The annualized percentage growth in dividends paid per share over a period, typically 5 years.
Think of it like this
Like getting annual raises at your job - a company that consistently raises dividends shows commitment to shareholders.
Formula
Dividend Growth = (Current Dividend รท Past Dividend)^(1/Years) - 1- Current Dividend: Most recent annual dividend per share
- Past Dividend: Dividend from 5 years ago
- CAGR: Compound Annual Growth Rate
Why it matters
- Shows company's commitment to shareholders
- Growing dividends often signal healthy business
- Dividend Aristocrats have 25+ years of increases
- Helps maintain purchasing power against inflation
What's a good value?
< 3%
Slow
Below inflation, losing purchasing power
3-7%
Moderate
Keeping pace with inflation
7-12%
Strong
Building shareholder wealth
> 12%
Aggressive
May not be sustainable long-term
Real-world example
Johnson & Johnson has grown dividends for 60+ consecutive years at about 6% annually.
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