What does DGR mean in UNCLASSIFIED

What Is The Dividend Growth Rate?

The dividend growth rate measures the rate at which a company's dividends are increasing over time. It is calculated by taking the current dividend per share and dividing it by the prior year's dividend per share, then multiplying that number by 100 to express it as a percentage. This number provides investors with an indication of whether or not a company is able to maintain consistent payouts from one year to another. Companies that have consistently high dividend growth rates over many years tend to be viewed more favorably among investors than those with lower increases or decreases in their payouts over time.

Why Is The Dividend Growth Rate Important?

The dividend growth rate is important for several reasons. First, it helps investors gauge a company's ability to grow its payouts over time. High dividend growth rates suggest that a company has ample resources available and can continue paying out higher amounts of cash each year — something investors generally appreciate since it can boost their returns on investment (ROI). Additionally, companies with high dividend growth rates often find themselves in favor with shareholders, who may view them as having strong financial health and potential for above-average returns in the future.

Finally, analyzing a company's dividend growth rate can help investors identify potential stock picks as well as identify when it might be better to seek alternatives investments or stay away from certain stocks altogether. For instance, if other firms in the same industry are trading with higher dividends and better returns on equity (ROE) than what your chosen stock has achieved, you may want to consider switching up your investments strategy accordingly.