This investment strategy focuses on companies with a history of consistently increasing dividend payouts. It emphasizes not only the current yield but also the potential for future dividend growth, aiming to capture both income and price appreciation. For instance, a company that has raised its dividend annually for the past ten years while also exhibiting strong earnings growth would be a prime candidate.
Targeting companies with this profile offers several potential advantages. Growing dividends can provide a hedge against inflation and contribute to compounding returns over time. Furthermore, the discipline of consistently raising dividends often signals a financially healthy and well-managed company. Historically, this investment approach has demonstrated the potential to deliver competitive long-term performance.
