Fundamental Glossary / Dividend Metrics
Dividend Growth Rate
The rate at which the dividend per share increases.
Formula
For one year: (DPS now - DPS then) / DPS then. For a span, the CAGR of DPS.
What it means
The dividend growth rate is an input to the Gordon growth model and a fact in any income record. It is only sustainable when earnings and cash flow grow at a similar pace, or when the payout starts low enough to rise.
How to read it
A long streak of increases is a management commitment culture. The size of the increases still has to fit the cash.
What to watch
A rate computed from a tiny base, or from a year that included a special dividend, will not be the future rate. Use the regular dividend.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.