A Ned Davis Research study of S&P 500 stocks from 1973 to 2025 found dividend growers and new dividend payers averaged 13% annual returns, versus 11.5% for non-payers, with 27% lower volatility and a lower historical beta: 0.94 versus 1.11.
The study found companies that kept dividends unchanged returned about 11.1% annually, while those that cut or eliminated payouts returned 9.5%. The article links dividend growth to stronger balance sheets and cash flows, while cautioning that dividend growers do not outperform in every market environment.
The article highlights three ETFs with different dividend-growth requirements: DGRO requires five consecutive years of increases and a payout ratio below 75%; VIG requires 10 years and excludes the highest-yielding quarter of eligible stocks; NOBL requires a 25-year record.
