This funding technique focuses on firms with a historical past of constantly growing dividend payouts. It emphasizes not solely the present yield but additionally the potential for future dividend development, aiming to seize each revenue and value appreciation. As an illustration, an organization that has raised its dividend yearly for the previous ten years whereas additionally exhibiting robust earnings development could be a chief candidate.
Focusing on firms with this profile gives a number of potential benefits. Rising dividends can present a hedge in opposition to inflation and contribute to compounding returns over time. Moreover, the self-discipline of constantly elevating dividends typically alerts a financially wholesome and well-managed firm. Traditionally, this funding strategy has demonstrated the potential to ship aggressive long-term efficiency.
