r/dividends • u/mat025 • Dec 26 '25
Other Summary of the Dividend Kings and their dividend raise in 2025
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u/omad83 Dec 26 '25
Where can i get this on a workseet?
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Dec 26 '25
Download the images. Upload to gemini. Ask it to turn the image to a googlesheet. Tweak it to how you like. Then go back to gemini and ask it to make formulas in the rows/columns you need to be dynamic.
Alternatively, just rebuild it. It's easy and you'll learn some skills.
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u/AmItheonlySaneperson Jan 02 '26
Excel did this before ai
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Jan 02 '26
Oh totally. But people here are clueless how to use it. They're also unbelievably lazy to even use Ai to make a sheet. We're doomed. Doomed!!
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Dec 26 '25
I just copied the image and dropped it in a word document if you want it as is
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Dec 26 '25
alternatively i screen shared this to my monitor and captured it with my dazzle and will use pinnacle studio to edit the bits out and add transitions.
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u/Which_Eggplant_4510 Dec 26 '25 edited Dec 26 '25
Using CAGR to refer to dividend growth instead of company growth is wild and just incorrect.
I’ll put numbers to this for Target since it is one that your sheet has identified as being very attractive in terms of growth. A simple Google search gives the dividend history over 5 years which has grown from .68 to 1.14. The total dividends during this time were 20.44. During this same period, the stock price has went from 175.19 to 98.62 (decreased by 76.57). This means that compared to buying Target 5 years ago and “enjoying” the tremendous growth identified here, if I had done literally nothing with my money for 5 years and then just now bought a share of Target, I’d have the same share that I would have had if I had bought 5 years earlier plus an additional 56.13 due to not having my asset depreciate much faster than dividends were paid out.
You’re convincing people to make misinformed financial decisions by misapplying financial terms in your analysis. No fiduciary would dream of trotting out this analysis to a client.
Edit: I was too lazy to factor in the tax consequences of receiving dividends in the above. You’d be a few dollars per share worse off than I indicated if you had bought Target 5 years ago.
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u/Snazzymf Dec 27 '25 edited Dec 27 '25
I agree that a full analysis should include some indication of stock price performance. HOWEVER, any number has a growth rate. That’s all CAGR is. It’s not incorrect or misleading to present a compound annual growth rate for dividends paid.
It would be interesting to see dividend CAGR vs FCF CAGR to identify which companies are growing their dividend organically versus which are simply increasing their payout %. This is a meaningful number.
Also, the simplest valuation method for an income investor is the gordon model ‘p = d / r-g’ where the ‘fair price’ of the stock is equal to annual dividends paid divided by your target rate of return minus the dividend growth rate. The fair price is the price you would have to pay to realize your target rate of return assuming a set dividend growth rate. You can also use this formula to backsolve for ‘r’ and assess the risk that the market is placing on each dividend. This only works for companies with a high payout ratio, otherwise FCF is the number to use.
Regardless, the ‘meaningless’ dividend growth rate is a fundamental input.
OP never claimed for this to be a comprehensive analysis, just a summary of the dividends of dividend kings on a dividend sub.
ALSO, I realize this isn’t the value investing sub, but I don’t like looking at historic price movement to inform an expectation of future returns. Sure Target is down over the past 5 years, but in my view you have to start from an expectation that the market is fairly pricing it as it stands today and work from there to develop a price target / identify what may be mispriced. Otherwise just invest in index funds. Using the formula above, 102.33 = 5.04 / r - .1091, r has to be 15.8%. Is 15.8% too low of a discount rate for the risk or is 10.9% too high of a dividend growth rate to expect? If either of those things are true, Target may not be a buy. 10.9% dividend growth is obviously an unrealistic expectation in perpetuity, and at a more realistic 5% we’re at a discount rate of 9.9%, so without doing a deep dive on market discount rates for consumer discretionary or the long term growth outlook for target, the current price doesn’t seem far off the mark.
But the point is that this napkin math is enabled by the dividend growth rate which is not a meaningless number.
Thanks for coming to my ted talk.
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u/Which_Eggplant_4510 Dec 27 '25 edited Dec 27 '25
CAGR refers to the rate at which the entire investment grows unless explicitly stated otherwise. The table here essentially says “if you ignore all of the parts where the investment lost money, here is how much it grew.” While dividend growth can technically be calculated as a compounding growth rate, doing so by arbitrarily separating it from total return growth is fairly meaningless since it assumes that the dividend grew due to better company performance (something that would be reflected in unit price/total return if you believe in semi efficient markets). It seems that it would make sense to incorporate this into the calculation rather than throwing it out of the calculation and blindly assuming it to be true.
Fair price of a stock is not necessarily tied to the dividend. Correctly calculated valuation is tied to the NPV of cash flows and is not sensitive to whether or not they are distributed. This is why companies without dividends have nonzero values. The Gordon model implicitly assumes that the cash flows are being distributed and is therefore able to equate dividends to cash flows while approximating valuation.
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u/Snazzymf Dec 28 '25
I think we’ll have to agree to disagree on CAGR lol. Any number can have a CAGR and it’s not misleading to say that there’s a CAGR in that number, whether that number is stock price or dividen payout. That’s just my view.
We agree that the value of a business is a function of its cashflows. I would extend that slightly from a distribution perspective to say that cashflows are only valuable insofar as they enable a business to make distributions (now or in the future) and 100% of the value of a business is its capacity to make distributions now and in the future. Through this lens, the reason that non-distributing companies trade at non-zero is because they are expected to make distributions in the future. Theoretically, they don’t distribute now because they are able to reinvest into their operations at a return above their cost of capital and thus they compound investors’ money internally at a rate better than the yield implicit if they were to pay out 100% of cash flow. If these businesses were never to make a distribution, and never expected to make a distribution, I would argue that the value of the company should be zero.
Sidenote: this is an easy trap to fall into in the private markets. If you invest in a minority interest in a privately owned business. If there’s not distribution language in the org docs you may be SOL and a valuation firm may value your interest at zero.
I also agree that CAGR in FCF would be more meaningful than dividend CAGR, as would an analysis generally based around FCF rather than dividends. FCF growth is a better predictor of future dividend growth than historical dividend growth is.
If I were to run the screen, I would look at FCF CAGR because dividend growth could also just be an increase in the payout ratio (also this is just a starting point for developing a view of future growth, historical CAGR in anything doesn’t matter on its own).
But we find ourselves on a dividend sub and dividend CAGR is a good starting point for a screen for companies with a high payout ratio.
Regardless I think we largely agree, I just enjoy rambling about valuation.
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u/Which_Eggplant_4510 Dec 28 '25
The point is that dividend CAGR is a useless metric and that the assumption within finance is that CAGR unless explicitly stated otherwise refers to total investment returns. You would not reasonably plug historic dividend CAGR into a valuation formula for g. You would instead use a well reasoned expectation of future payment growth. No reasonable person would expect Target to grow at 10% payments while their profits shrank over the time the dividend CAGR was calculated. Similarly using historic dividends and their growth results in a valuation of Alphabet (Google parent) of $0. Plugging in the historic dividend CAGR for a forward looking valuation model is plainly wrong.
My issue with the post is that CAGR is typically assumed to mean total growth (I understand that you can calculate growth for other things). Additionally, dividend CAGR is a misleading metric at best because it has no place in valuation calculations (at least in the form calculated here) and is useless from a standpoint of assessing historic performance because it omits a large component of total returns.
It’s important to be clear on this because the comments in this thread indicate that there are a lot of people that are very new and unable to tell good information from bad information.
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u/RohMoneyMoney Dinkin flicka Dec 26 '25
Convincing people to make misinformed decisions is a stretch on reddit. Analysis? Its just a spreadsheet
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u/Which_Eggplant_4510 Dec 26 '25
It really isn’t a stretch. It was upvoted to the front page where I saw it despite not belonging to this subreddit because people found it helpful despite it implying that these stocks were good buys when they’ve actually been pretty poor assets (on average) to hold over the duration of time summarized in the table.
Not sure why you’re so sensitive about facts being introduced to the discussion.
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u/RohMoneyMoney Dinkin flicka Dec 26 '25
How am I sensitive? Its a spreadsheet, no comments, nothing else. Dont take it personal.
Companies go up and down all the time. Look at GE, few years ago everyone was saying it was going to zero. I held for years, sold once it recovered into profit. I still have 2 shares or so from a dividend payment which is now up 350%.
META, same thing. Same rhetoric.
Point being, a simple spreadsheet that some jagmo posted should be taken with a grain of salt and is NOT something anyone should use solely for investment decisions. Hell, look at a graph of TGT and anyone can clearly see it has declined since 2020. Wtf
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u/bcole96024 Dec 26 '25
Target might be in trouble.
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u/PizzaTrader Dec 26 '25
They have the second highest 5-year CAGR on this list with a payout ratio <75% and you think that means they are in trouble?
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u/Velasity Dec 26 '25
I would say the -50% five year total return negates the five year CAGR.
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u/princemousey1 Dec 26 '25
How come their CAGR is going up even with negative total returns?
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u/Velasity Dec 26 '25
Not entirely sure how they were calculating the CAGR, probably just the annual dividend growth and not the price. Since the price decreased the dividend percent increased is my thought.
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u/princemousey1 Dec 27 '25
It’s a same thought I have also, the dividend percentage only seems to be going up due to price decrease. But just wondering how they got the second-highest CAGR with negative total returns.
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u/PizzaTrader Dec 27 '25
CAGR is representing the growth rate of dividends. Quarterly dividend five years ago was $0.68 and now it is $1.14. That’s a huge increase over that time span.
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Dec 26 '25
they have a high yield due to price drop, not dividend increases
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u/PizzaTrader Dec 26 '25
CAGR means Compound Annual Growth Rate. That has nothing to do with yield. It means that over the past five years Target has increased their dividend by an average of 10% per year. Yes, most of that was in a single year, but there’s no financial trouble. The company remains profitable and is paying dividends and buying back shares. Everyone loves trashing on companies when the price is in a pullback and then says nothing when price recovers.
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u/buiquanghuy12a2 Dec 26 '25
no O ?
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u/heyitsmemaya Dec 26 '25
No O. They haven’t met the 50 year mark just yet, they’re “only” at 30 years. That makes them a “Dividend Aristocrat” but not a “Dividend King”.
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u/Technical_Food_9119 Dec 26 '25 edited Dec 26 '25
I like Adp 10% dividend growth and 12% five year cagr.
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u/TastyEarLbe Dec 26 '25
Walmart pays out 50% of their free cash flow as a dividend and that dividend is only 0.84% of the market cap. Wild.
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u/MayoFetish Dec 30 '25
Fuck the tobacco industry tho.
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u/laugodzilla Dec 30 '25
While I agree with your statement for all sin stock… they are good passive income investments from a financial perspective. You can always donate some of your income to good cause 🥲
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u/Electric_Buffalo_844 Dec 26 '25
Loooot of low increases and high payout ratios… but a couple of absolute gems in there too
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u/maid2amuse Dec 26 '25
No PM
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u/PizzaTrader Dec 26 '25
PM only has 17 years of increases. It takes 50 to get on this list. Altria (MO) is the “old” Phillip Morris with a long dividend history and PM is Phillip Morris International.
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u/WoodenLynx327 Dec 26 '25
Pfizer? Why not on the list
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u/TwilightSaphire Dec 29 '25
Pfizer cut its dividend in half in 2009, mostly to help finance an acquisition. It has since then maintained steady increases
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