Q: What is a good dividend growth rate?
A: 1-year growth above 5% is solid for established dividend payers. 5-year growth above 25% (roughly 4.5% annualized) indicates a strong track record. Dividend growth should be sustainable relative to earnings growth — if dividends grow faster than earnings for extended periods, the payout ratio rises toward unsustainable levels.
Q: How does dividend growth relate to the payout ratio?
A: If dividends grow faster than earnings, the payout ratio rises. If earnings grow faster than dividends, the payout ratio falls. Sustainable dividend growth requires earnings growth that at least matches the dividend increase rate.
Q: Why might dividend growth differ between platforms?
A: Some platforms use dividends declared rather than actual cash paid. Others may include special or one-time dividends. GeminIQ uses Dividends Paid from the cash flow statement, which reflects actual cash distributed.