Jun. 19 at 7:35 PM
Dividend growth follows free cash flow growth in the long term.
$LVMHF over the last decade is a great example.
Free Cash Flow:
2014 free cash flow:
$2.75B
2024 free cash flow:
$13.37B
A 17.2% compounded free cash flow annual growth rate.
Dividends Paid Out:
Total 2014 dividends paid out:
$1.61B
Total 2024 dividends paid out:
$7.32B
A 16.37% compounded annual dividend growth rate.
Notice how close the free cash flow growth rate is to the dividend growth rate?
Over the long term, dividend growth always follows free cash flow growth.