<p>Dividend growth rate (DGR) is the annual increase in a company's dividend payout. It's a key metric in fundamental analysis, indicating a company's financial health and commitment to shareholders.</p>

<h2>How It Works</h2>
<p>The DGR is calculated as:</p>
<ul>
  <li><strong>Current Dividend</strong> - <strong>Previous Dividend</strong> / <strong>Previous Dividend</strong> x 100</li>
</ul>
<p>For example, if a company's dividend increased from $1 to $1.10, the DGR would be (0.10 / 1) x 100 = 10%.</p>

<h2>Why It Matters</h2>
<p>DGR matters because it reflects a company's ability to generate earnings growth and return capital to shareholders. A consistent, high DGR can signal a strong business model and management team. For instance, a company with a 10-year DGR of 15% has more than doubled its dividend during that period, demonstrating significant value creation for shareholders.</p>