Dividend CAGR: Measuring Payout Growth Properly
Dividend CAGR — compound annual growth rate — turns a payout history into a single comparable number: the steady yearly growth rate that would take the dividend from where it was to where it is.
How it is computed, and why annual totals
Take the annual dividend total N years ago and today's, and solve for the constant growth rate connecting them. Using full-year totals — split-adjusted, specials excluded — avoids the traps in per-payment comparisons: timing shifts, frequency changes, and one-off extras. That is exactly how the growth figures on our ticker pages are computed.
Different windows answer different questions. One year shows the current posture; five and ten years show the policy through a cycle. A high 10-year CAGR with a fading 1-year figure often marks a maturing payer.
Growth against yield
Growth and starting yield trade off: a 2% yield compounding at 10% doubles its payout in about seven years, overtaking a static 4% yield on cost. Neither profile is superior in the abstract — the comparison is about horizon, and the honest way to make it is with both numbers on the table.