August 17, 2016

Dividend growth investing offers a compelling and powerful investment strategy capable of bringing both capital appreciation potential and an income stream, a result even more important in today’s interest rate environment. As displayed in the charts to follow, companies that are able to grow their dividends have historically outperformed the rest of the market. Dividends provide a naturally stabilizing element of total return as a steady income stream reduces the longer-term impact of price movements.

What does this mean for today’s markets? Cash on corporate balance sheets is currently at record highs while dividend payout ratios are historically low, meaning there is room for potentially significant dividend growth (Source: Bloomberg, Reality Shares Research).


Past performance does not guarantee future results. Source: Ned Davis Research, Reality Shares Research. A stock is classified as dividend-paying if it paid a cash dividend at any time during the previous 12 months (on a rolling basis). Dividend growers and initiators include stocks that raised their existing dividend or initiated a new dividend during the preceding 12 months (on a rolling basis). Dividend cutters or eliminators include stocks that lowered their existing dividend or stopped paying regular dividends during the preceding 12 months (on a rolling basis).

By taking a future-looking approach to dividend growth investing, investors can take advantage of a powerful strategy bringing the potential for capital appreciation and income. Please see our whitepaper, The Reality of Dividend Growth Investing: Accessing the Future of Dividend Growth, for more information.


S&P 500: A broad stock market index of 500 large companies based on market capitalization.