Incremental Dividend


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.

BREAKING DOWN '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.

  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. Put-Call Parity

    A principle that defines the relationship between the price of ...
  6. Alpha

    Alpha is used in finance to represent two things: 1. a measure ...
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. Investing

    Is it Time to “Buy” Inflation?

    Based on recent data from the Treasury-Inflation Protected Securities (TIPS) market, it would seem that most investors aren’t worried about inflation.
  5. Stock Analysis

    8 Solid Utility Stocks for a Bear Market

    If you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
  6. Investing Basics

    4 Reasons a Company Might Suspend Its Dividend

    Learn about the four most common reasons a company may choose to suspends its dividends, including financial trouble, funding growth and unexpected expenses.
  7. Mutual Funds & ETFs

    Top 4 Conservative Allocation Mutual Funds

    Discover the top-rated mutual funds in the conservative allocation category, and learn which investors can utilize them most effectively.
  8. Stock Analysis

    This is What Bill Gates's Portfolio Looks Like

    Find out about the stocks Bill Gates has in his portfolio. Learn about the close personal and business relationship Gates has with Warren Buffett.
  9. Savings

    7 Millionaire Myths

    Here are seven millionaire myths and realities that reveal they don’t quite have it all.
  10. Investing Basics

    5 Common Misconceptions About Dividends

    Here are five common misconceptions about dividends that are important to know.
  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. Do mutual funds pay interest?

    Some mutual funds pay interest, though it depends on the types of assets held in the funds' portfolios. Specifically, bond ... Read Full Answer >>
  3. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  4. Do mutual funds pay dividends?

    Depending on the specific assets in its portfolio, a mutual fund may generate income for shareholders in the form of capital ... Read Full Answer >>
  5. How often do mutual funds pay capital gains?

    The frequency with which mutual funds pay capital gains varies. However, funds that generate a profit within a given year ... Read Full Answer >>
  6. Can dividends be paid out monthly?

    Though it is more common for dividends to be paid quarterly or annually, some stocks do pay monthly dividends. Dividends: ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
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!