Dividend Growth Rate

If you know what dividends are, then dividend growth rates are just how much a dividend has increased in value over a year, in percentage terms. If you’re here because you’re looking at a quarterly or monthly dividend growth rate, not to fret...that is a thing too...but usually, used on its own, implies an annual percentage.

Don’t know what a divided is? A dividend is the payout when a company distributes cash to its shareholders, who are people that invest in the company. It’s kind of an “I’ll scratch your back if you scratch my back” kind of thing.

Shares are just stocks...it’s just that “shareholders” means stockholders for that particular company’s stocks. “Shares” is being specific, “stocks” is being general. Both mean investors are pumping money into a company via a financial instrument in exchange for cash-money in the future.

One type of cash-money you can get from a stock is a dividend (some of a company’s earnings), which can grow depending on how well that company is performing. When times are good, dividend growth rates go up. When the company is doing poorly, dividend growth rates go down, down, down.