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.

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. A classification of trading shares when a declared dividend belongs ...
  5. Tight Monetary Policy

    A course of action undertaken by the Federal Reserve to constrict ...
  6. Laissez Faire

    An economic theory from the 18th century that is strongly opposed ...
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

    3 Healthy Financial Habits for 2016

    ”Winning” investors don't just set it and forget it. They consistently take steps to adapt their investment plan in the face of changing markets.
  5. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  6. Economics

    The Truth about Productivity

    Why has labor market productivity slowed sharply around the world in recent years? One of the greatest economic mysteries out there.
  7. Investing Basics

    4 Things That Make a Stock a Safe Bet

    No investment is a sure bet, but you can reduce your chances of taking a loss by choosing fair-priced stocks with growth potential and low volatility.
  8. Investing Basics

    The Complete Guide to Financing an Investment Property

    If you're considering adding an investment property to your portfolio, you need to know what your options are for financing its purchase.
  9. Investing Basics

    A Beginner's Guide to Investing in Company Stock Plans

    There are certain advantages to investing in your employer's stock but there are some potential drawbacks to be aware of.
  10. Stock Analysis

    The 5 Best Stocks That Pay Monthly Dividends (PSEC, LTC)

    Get the scoop on five of the best stocks that pay regular monthly dividends, offering investors looking for regular income dividend yields of up to 16%.
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 finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  3. What is the difference between positive and normative economics?

    Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ... Read Full Answer >>
  4. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  5. What are the dividend reinvestment options for a mutual fund?

    There are two primary choices for how investors can choose to handle dividend distributions made by mutual funds that they ... Read Full Answer >>
  6. Do mutual funds pay dividends or interest?

    Depending on the type of investments included in the portfolio, mutual funds may pay dividends, interest, or both. Types ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center