This funding technique focuses on firms with a historical past of persistently growing dividend payouts. It emphasizes not solely the present yield but in addition the potential for future dividend progress, aiming to seize each revenue and worth appreciation. As an example, an organization that has raised its dividend yearly for the previous ten years whereas additionally exhibiting sturdy earnings progress could be a primary candidate.
Focusing on firms with this profile affords a number of potential benefits. Rising dividends can present a hedge towards inflation and contribute to compounding returns over time. Moreover, the self-discipline of persistently 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.
