Dividend Growth: The Quiet Engine of Wealth

Dividend growth investing sounds simple, but doing it well for decades is not. Markets get noisy. Numbers get confusing. That’s why we wrote Dividend Growth: The Quiet Engine of Wealth—a practical guide to building a framework you can stick with when things get uncomfortable. You can get a free copy here.

Plus, join our market newsletter for more on dividend growth investing.

________

If you could only look at one number to judge whether a dividend can keep growing for decades, what would it be?

In this episode, we strip investing back to first principles. Greg talks about why investors get overwhelmed with data and how focusing on the wrong metrics can quietly lead you off track. Using a simple hot dog stand analogy, he explains why familiar numbers like return on equity (ROE) and return on assets (ROA) can distort reality, especially when leverage enters the picture.

From there, he introduces return on invested capital (ROIC) and shows why it does a better job connecting business quality to long-term dividend growth. Later, Greg addresses what ROIC can’t tell you and why context always matters.

Along the way, he walks through real-world examples, including Kraft Heinz ($KHC), Southern Company ($SO), Williams-Sonoma ($WSM), and Microsoft ($MSFT), to show how capital allocation decisions compound over time.

[00:11] Introduction

[02:50] Information overload and the danger of focusing on the wrong numbers

[04:40] The hot dog stand: ROA vs. ROE and the role of leverage

[08:15] Why both ROA and ROE can mislead dividend investors

[09:35] Return on invested capital (ROIC) explained in plain English

[13:30] ROIC, cost of capital, and long-term value creation

[14:55] Case study: Kraft Heinz and why high yield can be a trap

[18:30] Case study: Southern Company and when low returns still “work”

[22:10] Case study: Williams-Sonoma and disciplined capital allocation

[24:55] Case study: Microsoft and the power of long-term compounding

[29:10] The limits of ROIC and why incremental returns matter

[31:25] Final takeaway: one number, long time horizons, evolving businesses

Send us a text

Disclaimer: Past performance does not guarantee future results. This episode is for educational purposes only and is not investment advice.

If you enjoy the show, we'd greatly appreciate it if you subscribe and leave a review

RESOURCES:

Schedule a meeting with us -> Financial Planning & Portfolio Management

Getting into the weeds -> DCM Investment Reports & Models

Visit our website to learn more about our investment strategy and wealth management services.

Follow us on:
Instagram | Facebook | LinkedIn | X

📘Free Short Book: Dividend Growth, the Quiet Engine of Wealth

If today’s market feels noisy, this short book lays out a calmer framework.

Dividend Growth: The Quiet Engine of Wealth explains the same principles discussed in this episode—discipline, compounding, sustainable income growth, and staying focused when markets distract.

It’s a quick read (about 90 minutes) and walks through how dividend growth works across full market cycles, including bull and bear markets.

👉 Download the free eBook:
growmydollar.com/dividend-growth-book

Plus, join our market newsletter for more on dividend growth investing.

________

Dividend growth investing can feel uncomfortable when a handful of growth stocks dominate headlines and performance. When value lags and momentum strategies seem unstoppable, it’s easy to wonder whether patience and discipline still make sense.

To round out 2025, Greg steps back from the noise to revisit foundational principles of dividend growth investing and explain why they remain intact, even in today’s market. He walks through why distraction is one of the biggest risks investors face, how compounding quietly does the heavy lifting, and why tying income growth to long-term economic growth creates a durable framework that doesn’t depend on short-term cycles

From the “Vitamin C” concept to classic compounding examples like the penny story and the Rule of 72, this episode reinforces how small, consistent decisions compound into meaningful income over time. Greg also revisits dividend growth targets, yield “sweet spots,” and the practical levers investors can pull to sustain income growth. The episode culminates in a real-world look at the model portfolio, which has been running since 2010.

From all of us here at The Dividend Mailbox®, Happy Holidays!

Topics covered:

00:00 – Introduction and why this is a good time to revisit first principles

01:10 – Market distractions, information overload, and staying focused

03:20 – Introducing the new book: Dividend Growth: The Quiet Engine of Wealth

04:20 – The “Vitamin C” concept and daily discipline

05:40 – The penny story and how compounding really works

09:40 – The Rule of 72 and the long-term cost of short-term decisions

11:10 – “The line”: GDP growth, earnings growth, and dividend growth

14:30 – Targeting 7% dividend income growth

16:30 – The 2–4% dividend yield sweet spot

17:55 – Income growth levers: reinvesting, reallocating, and dividend increases

20:4

Send us a text

Disclaimer: Past performance does not guarantee future results. This episode is for educational purposes only and is not investment advice.

If you enjoy the show, we'd greatly appreciate it if you subscribe and leave a review

RESOURCES:

Schedule a meeting with us -> Financial Planning & Portfolio Management

Getting into the weeds -> DCM Investment Reports & Models

Visit our website to learn more about our investment strategy and wealth management services.

Follow us on:
Instagram | Facebook | LinkedIn | X

How strong is your dividend growth portfolio? Send it to us for a free evaluation at dcm.team@growmydollar.com. Plus, join our market newsletter for more on dividend growth investing.

________

Consumer staples look reliable with strong brands, steady cash flow, and good yields. But dividends can’t outrun revenue forever, and across this sector the growth engine has stalled.

In this episode, Greg begins with a quick recap of how 2025 has unfolded so far, highlighting strong income growth for the model portfolio, a handful of growth names driving market performance, and value strategies continuing to lag. From that backdrop, he digs into the disconnect between the appearance of safety in consumer staples and the underlying fundamentals that truly support dividend growth.

Using Kimberly-Clark ($KMB), General Mills ($GIS), Colgate ($CL), Procter & Gamble ($PG), and Church & Dwight ($CHD) as case studies, Greg shows how companies with high ROIC and defensive business models can still become no-growth traps. These companies were once consistent outperformers with impressive dividend histories, but the economy evolves and so have their growth profiles.

Topics Covered:

03:05 – Comparing dividend growth to the S&P 500

05:43 – Investing styles cycle and chasing rarely works

07:07 – Surface numbers can be misleading

11:00 – Kimberly-Clark: attractive metrics masking zero growth

16:42 – General Mills: high yield but barely growing

18:36 – Colgate: excellent margins, slow dividend progression

19:58 – Procter & Gamble: financial strength, but limited growth

21:03 – Church & Dwight: a past outlier that doesn’t meet our targets

23:57 – Kimberly-Clark’s planned Kenvue acquisition

29:36 – The mosaic of evidence investors should pay attention to

Have questions or want a second opinion on your dividend strategy?
Email us anytime at dcm.team@growmydollar.com for a free portfolio review and ongoing dividend insights.

Send us a text

Disclaimer: Past performance does not guarantee future results. This episode is for educational purposes only and is not investment advice.

If you enjoy the show, we'd greatly appreciate it if you subscribe and leave a review

RESOURCES:

Schedule a meeting with us -> Financial Planning & Portfolio Management

Getting into the weeds -> DCM Investment Reports & Models

Visit our website to learn more about our investment strategy and wealth management services.

Follow us on:
Instagram | Facebook | LinkedIn | X