What is dividend growth investing?

Dividend growth investing is a specific strategy, not just 'buying stocks that pay dividends.' Instead of scanning for whichever stock has the highest yield today, it favors companies with a track record of raising their per-share dividend consistently, year after year, sometimes for a decade or more in a row.

That track record matters because a rising dividend is hard to fake. A company can't keep increasing its payout every year without the underlying business actually generating more cash to support it, so a long streak of raises is itself a signal, evidence that management is confident enough in future earnings to commit to paying out more of them, not just a nice perk for shareholders.

This is a different mindset from simply hunting for the biggest yield on a stock screener. A stock yielding 3% today but raising its dividend 8% a year will likely pay you more, and more reliably, a decade from now than a stock yielding 7% today with a flat or shrinking payout. The rest of this course is about telling those two apart.

A Philippine universal bank has raised its annual dividend every year for the past nine years, from ₱1.20 per share to ₱2.10 per share, even though its yield today is a modest 3%. A smaller finance company yields 6% but has paid the exact same ₱1.00 per share dividend for five straight years without a single increase. The bank is the dividend grower; the finance company, despite the higher current yield, isn't.