Dividend growth

Dividend growth is the rate at which the payment per share has risen over a stretch of years, usually expressed as an average annual percentage across the whole period. Five years of payments running from one euro to one euro fifty is a growth rate of about eight and a half percent a year. The figure is arithmetic applied to a history of declared payments, and it flattens the individual years into one rate.

Why it matters

It is the number behind the idea that a modest yield today can become a large yield on cost after fifteen years, since a payment that keeps rising against a fixed purchase price compounds in the same way a price does. Two cautions travel with it. The average hides its own shape, so one exceptional year can make a flat record look like a trend, and a payment can be cut as easily as raised. What the rate describes is the past; it is not a schedule for the future.

How BullBenchmark shows it

We keep the payments you received from your broker statements year by year, so the record you read is your own history rather than a published average for a company you may have bought halfway through. The year report closes off each calendar year on one page, which is where the dividend total for that year sits next to the rest of the result. Several years of that record are filled in on the demo portfolio.

Related terms

Yield on cost · Dividend · Projected dividend income

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