Most investors fixate on yield. They chase 5%, 6%, 7% payouts without asking the hard question: what happens in ten years?
A 2% yield that grows 12% annually will lap a static 5% yield in less than a decade. Compounding isn't sexy on day one. But it's everything by year fifteen.
Dividend growth signals pricing power, margin expansion, and management discipline. A rising payout means the business is actually getting stronger, not just returning cash because it has nothing better to do.
Yield is a snapshot. Growth is a story. Most people pick the wrong one.
A 2% yield that grows 12% annually will lap a static 5% yield in less than a decade. Compounding isn't sexy on day one. But it's everything by year fifteen.
Dividend growth signals pricing power, margin expansion, and management discipline. A rising payout means the business is actually getting stronger, not just returning cash because it has nothing better to do.
Yield is a snapshot. Growth is a story. Most people pick the wrong one.