This quality strategy looks beyond past dividend growth.
This strategy attempts to select stocks that can offer high dividend growth in the future, regardless of whether they have done so in the past. Many of these names would not pass a demanding screen for past dividend growth, similar to those that Vanguard Dividend Appreciation ETF (VIG) and SPDR S&P Dividend ETF (SDY)employ. There are pros and cons to each approach. A record of dividend growth is evidence that a firm's managers are committed to a shareholder-friendly payout policy and is a sign of strong and stable profitability. But restricting stock selection to this criterion excludes many emerging dividend-paying firms and ignores forward-looking information about the sustainability of dividend growth...
Source: Morningstar