Dividend CAGR: Compound Annual Growth Rate

Dividend CAGR measures how fast a company's dividend has grown over time, expressed as an annualized percentage.

The Formula

CAGR = ((Ending Value ÷ Beginning Value)^(1/Years) - 1) × 100

Example

If a dividend grew from $1.00 to $1.61 over 5 years:

CAGR = (($1.61 ÷ $1.00)^(1/5) - 1) × 100 = 10%

What Is Good?

• 3-5%: Matches inflation, maintains purchasing power
• 5-10%: Solid growth - income doubles every 7-14 years
• 10%+: Excellent growth - compounds wealth rapidly

How Dividend.Direct Uses It

We calculate 1-year, 3-year, 5-year, and 10-year CAGRs. The 5-year CAGR feeds into our Quality Score and Chowder Number.