Dividend Growth Rate

The annualized rate at which a company raises its dividend per share over time.

Part of the Growth & Capital Returns course · Lesson 16 of 26

Formula

1-yr DGR = (D_this_year / D_last_year) - 1; n-yr CAGR = (D_end / D_start)^(1/n) - 1

What it is

Dividend Growth Rate (DGR) is the percentage by which a company's dividend per share increases each year. It can be measured year over year or as a smoothed average over several years. A steady, rising DGR is often read as a sign of durable earnings and management confidence.

Why it matters

A growing dividend can raise your income and help offset inflation, so two stocks with the same starting yield can deliver very different income a decade later. DGR also feeds dividend-based valuation models like the Dividend Discount Model.

How it's calculated

For a single year, divide this year's dividend by last year's, subtract 1, and convert to a percent. Over several years, use the compound annual growth rate (CAGR) between the first and last dividend.

How Quintarthai uses it

Review a company's multi-year dividend history and per-year growth on its company deep-analysis page (Financials 10-yr and Statistics tabs).

Cross-border note. Compute DGR in the dividend's native currency. A Canadian payer that raises its CAD dividend can still show a flat or falling USD dividend to a U.S. holder if the loonie weakens, so currency-convert only after measuring the underlying growth.

FAQ

Which is better, a high yield or a high growth rate?

It depends on your goal. A high current yield pays more income now; a high growth rate pays less now but can overtake the high-yield stock over time. Both matter, and a very high yield can also signal that the market expects a cut.

How many years should I average?

Five and ten years are common. A longer window smooths out one-off raises and shows whether growth survived a recession, but it can hide a recent slowdown, so check the latest one or two years too.

See Dividend Growth Rate on a real company

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