Incremental Dividend

AAA

DEFINITION of 'Incremental Dividend'

A series of regular increases to a corporation's dividend. Many large corporations choose to incorporate an incremental dividend policy because it illustrates the company's ability to continually increase the value to shareholders and is often a useful method used to maintain the interest of many income investors for the long run.

INVESTOPEDIA EXPLAINS 'Incremental Dividend'

For example, in 2004 the board of directors of Dominion Resources implemented a incremental dividend policy as a method of enhancing shareholder return.

It is important to note that any firm that fails to increase a dividend after it has a record of consecutive increases can experience a sharp sell-off because investors become apprehensive of when the dividend will be able to move up again.

RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Holder Of Record

    The name of the person who is the registered owner of a security ...
  3. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
  4. Ex-Dividend

    A classification of trading shares when a declared dividend belongs ...
  5. Financial Singlularity

    A financial singularity is the point at which investment decisions ...
  6. Revenue-based Financing

    Revenue-based financing, also known as royalty based financing, ...
RELATED FAQS
  1. I would like to invest in a dividend-paying stock. How can I find out which stocks ...

    There are several accessible sources to help investors identify dividend-paying stocks. Here are a few we can recommend:   Generally, ... Read Full Answer >>
  2. What is the average annual dividend yield of companies in the retail sector?

    According to data published by the NYU Leonard N. Stern School of Business, as of January 2015, the average annual dividend ... Read Full Answer >>
  3. What kind of companies in the utilities sector offer the most stable dividends for ...

    Among the companies that offer the most stable dividends for risk-averse investors are large, solidly established U.S.-based ... Read Full Answer >>
  4. What average annual total return does the utilities sector generate?

    Due to their highly stable earnings and cash flows, utilities companies are popular among investors interested in dividend ... Read Full Answer >>
  5. Why is the utilities sector popular among value investors?

    The utilities sector is popular among value investors due to the dividends paid by utility companies as well as the traditionally ... Read Full Answer >>
  6. What are the most popular mutual funds that give exposure to the utilities sector?

    Some of the most popular mutual funds that provide exposure to the utilities sector include American Century Utilities, Prudential ... Read Full Answer >>
Related Articles
  1. Investing

    Build A Dividend Portfolio That Grows With You

    Balance risk and return to produce adequate income despite inflation.
  2. Investing Basics

    Dividend Facts You May Not Know

    Discover the issues that complicate these payouts for investors.
  3. Retirement

    Dividends Still Look Good After All These Years

    Find out how this "first love" still holds its bloom as it ages.
  4. Professionals

    The Most Popular ETFs with Financial Advisors

    Financial advisors might continue to perform well by holding these popular ETFs, but time is limited.
  5. Economics

    Do Interest Rate Changes Affect Dividend Payers?

    Interest rate changes have an effect on prices of dividend-rich stocks in interest rate sensitive sectors like utilities, pipelines, telecommunications and REITs.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares Barclays 20+ Year Treasury Bond

    Learn about the iShares 20+ Year Treasury Bond ETF (TLT). TLT is a very liquid ETF with low costs that allow investors to gain exposure to treasuries.
  7. Investing

    Looking for Alternatives to Invest in Real Estate?

    There are several ways to invest in “real estate” via the stock market, buying stocks and hold them for years. We give you 5 ways to invest in real estate.
  8. Stock Analysis

    Is a Slumping Kinder Morgan a Good Buy?

    Learn how Kinder Morgan revenues are under pressure from lower commodity prices and how the growth of future dividend payments may be uncertain.
  9. Investing Basics

    The Risks of Chasing High Dividend Stocks

    Dividend stocks offer enticing yields, but a lot can go wrong on the way to collecting that dividend payout.
  10. Stock Analysis

    The Best Buy-and-Hold Stocks for Your Retirement Portfolio

    These stocks offer stability while exhibiting strong indicators of future growth.

You May Also Like

Hot Definitions
  1. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  2. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  3. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  4. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  5. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
  6. Himalayan Option

    An exotic equity option belonging to a class known as mountain range options. Himalayan options are based on a basket of ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!