Eoin Treacy's view

As I mentioned in last night’s broadcast, I spent some time this morning going through Japan’s market in search of companies with strong dividend growth.

The primary reason for pursuing this question was to highlight many companies are growing dividends at a rate higher than 10% on a rolling 3-year basis. That helps to emphasise dividend growth is not some passing fad but has become part of the corporate culture.

To compile the list I screened for companies with a market cap greater than $1 billion, 3-year average dividend growth of greater than 10% and positive performance year to date. 270 stocks fit those criteria and several are household name brands.

The additional reason for considering dividend growth is it is generally viewed as a bulwark against the prospect of higher benchmark interest rates. Dividend growth at a rate quicker than the pace with which a central bank is hiking rates is about the best defense investors have against both inflation and the efforts to contain it. That’s one of the primary reasons defense shares are among the last to peak in a bull market.