The dividend growth rate is how fast the per-share payout rises over time.
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.
Check your understanding
Two stocks both yield 3% today, but Stock A has a 10% dividend growth rate and Stock B's dividend has been flat for years. What does this tell an income-focused investor?
A higher dividend growth rate means the same starting yield can compound into much larger income over time and help offset inflation, even though current cash payments are equal.