Growth Dividend Stocks

Growth Dividend Stocks are stocks that combine dividend income with the potential for capital appreciation.

Understanding Growth Dividend Stocks

Growth dividend stocks combine the potential of growth stocks with the steady returns of dividends.

Typically, these stocks are from companies that pay dividends and reinvest a significant portion of their profits into the business to fuel further growth.

As a result, investors may enjoy a unique mix of income and possible share price appreciation.

When selecting these stocks, we often look for a history of dividend payments and a decent dividend yield. However, evaluating the company’s ability to sustain and increase dividend payouts over time is crucial.

A study suggests that dividend yield can be significant in selecting stocks, emphasizing consistent payouts which can indicate a company’s financial health.

Here’s a brief table illustrating what we consider when evaluating growth dividend stocks:

Criterion	Description
Dividend Yield	The current year’s dividend per share over the share price.
Dividend Growth Rate	The annualized percentage growth rate of the dividend.
Earnings Growth	The company’s historical and projected earnings growth.
Payout Ratio	The percentage of earnings paid to shareholders as dividends.
Financial Stability	Strong balance sheets and cash flow to support dividends.

We focus on companies with a balance between dividends and reinvestment, indicating a strategic approach to capital allocation.

Our aim is to capture gains from both the underlying business growth and the income generated from dividends, which might lead to appealing total returns for our portfolios.