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

    1. A distribution of a portion of a company's earnings, decided ...
  2. Dividend Policy

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

    A classification of trading shares when a declared dividend belongs ...
  4. Holder Of Record

    The name of the person who is the registered owner of a security ...
  5. Capital Loss Coverage Ratio

    The difference between an asset’s book value and the amount received ...
  6. Sucker Yield

    When an investor has essentially risked all of his capital for ...
Related Articles
  1. Build A Dividend Portfolio That Grows ...
    Investing

    Build A Dividend Portfolio That Grows ...

  2. Dividend Facts You May Not Know
    Investing Basics

    Dividend Facts You May Not Know

  3. Dividends Still Look Good After All ...
    Retirement

    Dividends Still Look Good After All ...

  4. I would like to invest in a dividend-paying ...
    Investing

    I would like to invest in a dividend-paying ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center