Finding your next dividend growth stock is often harder than analysing one. For many investors, the biggest challenge isn’t valuation models or payout ratios—it’s knowing where to start.

In this episode, we walk through the practical, real-world process we use to find dividend growth stocks worth analysing, especially from a European investor’s perspective. This isn’t about secret formulas or complex spreadsheets. It’s about building confidence, filtering noise, and developing a repeatable process you can stick with over decades.

This episode was recorded in 2020. While tools and market conditions evolve, the principles behind finding high-quality dividend growth stocks remain evergreen.

Why “Finding Stocks” Is the Hardest Part of Investing

Most new dividend investors assume the hard part is valuation. In reality, the biggest hurdle comes earlier: identifying which companies are even worth your time.

In this episode, we respond directly to listener questions asking how we actually discover dividend growth stocks in the first place. Not the metrics yet—but the sources, filters, habits, and thinking that turn an overwhelming universe of stocks into a manageable shortlist.

This is especially important for European investors, where clean, consistent data is harder to find than for US-listed companies.

Building Confidence Before Your First Investment

One of the most important themes in this episode is confidence. Putting your first €1,000 into the stock market feels very different from investing your tenth €1,000.

Early on, confidence doesn’t come from knowing everything. It comes from having just enough structure to avoid obvious mistakes. We discuss how following trusted dividend investors, newsletters, and blogs can act as training wheels—not as permanent crutches, but as a way to learn what “good” looks like.

Where EMF Finds Dividend Growth Stock Ideas

EMF explains how his journey began by following a US-based dividend investor who published monthly buy ideas with detailed reasoning. That structure helped him understand what questions to ask, even when he didn’t yet understand all the answers.

From there, tools like Dividend Champions / Contenders lists, stock screeners, and financial websites became idea generators rather than decision-makers. The key shift was moving from passively following ideas to actively filtering them using simple criteria: dividend history, earnings stability, payout ratios, and balance sheet strength.

Over time, EMF built his own Google Sheets framework to cross-check data and avoid relying on a single source, an important habit, especially when dividend data can be inconsistent or outdated.

The European Investor’s Data Problem

One of the biggest challenges discussed is that European dividend data is messy. Many tools are US-centric, and dividend histories, payout ratios, and even earnings figures can be unreliable when pulled from generic platforms.

This is why European investors often need to go closer to the source. Annual reports, company filings, and local exchange data become far more important. While this requires more effort, it also creates an edge: fewer investors are willing to do this work consistently.

How European DGI Finds Dividend Growth Stocks

European DGI shares how his early process looked very similar—using dividend-focused blogs, public lists, and stock ideas as inspiration. Over time, however, his approach shifted toward direct familiarity.

Instead of starting with screeners, he began with companies he already knew as a consumer. This “Peter Lynch” style approach—starting from products and services you recognise—helped narrow the universe quickly.

From there, deeper analysis began with the three financial statements: income statement, cash flow statement, and balance sheet. Rather than focusing on adjusted or non-GAAP metrics, the emphasis was on reported earnings and long-term trends.

Why Process Matters More Than Tools

A recurring message throughout the episode is that tools change, but process endures. Screeners, apps, and websites can help you move faster, but they don’t replace thinking.

European DGI explains how his process evolved into a structured analysis template influenced by dividend growth theory, value investing, and long-term capital preservation. Each potential investment is scored consistently, reducing emotional bias and helping compare companies objectively.

Crucially, valuation is done after analysing the fundamentals—not before. This avoids anchoring decisions to share price movements rather than business quality.

Learning Valuation Without Overcomplicating It

Valuation models like the Dividend Discount Model (DDM) and Discounted Cash Flow (DCF) are discussed not as magic answers, but as tools to improve decision-making.

The key takeaway is not that every investor must master advanced finance—but that if you’re planning to build a six-figure or seven-figure portfolio, investing time in learning basic accounting and valuation is one of the highest-return investments you can make.

Even a basic understanding of how future cash flows are valued today dramatically improves long-term outcomes.

Growth vs Dividend Investing: A Confidence Question

The episode also revisits a recurring debate: should investors focus on growth stocks first and dividends later?

Rather than offering a universal answer, the discussion highlights psychology. Dividend growth investing offers clarity. Income either grows or it doesn’t. Growth investing can work exceptionally well—but knowing when to sell is far harder.

For many investors, especially those balancing careers and families, dividend growth investing provides a framework that is easier to execute consistently without emotional stress.

When to Sell a Dividend Stock

Another listener question explores when a dividend stock should be sold. Both hosts acknowledge how their views evolved over time.

What began as a strict “sell on dividend cut” rule has softened into a more nuanced approach. A dividend cut alone is no longer an automatic sell. Instead, the focus is on why the cut happened and whether the long-term investment thesis remains intact.

This reflects a broader theme of the episode: maturity as an investor comes from understanding context, not rigid rules.

Stock Picks of the Week

As always, stock picks are shared for discussion, not as recommendations.

EMF highlights PepsiCo, citing its brand strength, dividend history, and resilience through economic cycles, while acknowledging valuation concerns. European DGI reiterates his conviction in Danone, focusing on consumer trends, plant-based nutrition, and long-term dividend sustainability.

Chapters From the Episode

0:00–6:00 – Market news and earnings reactions
6:00–11:30 – Dividend cuts, ethics, and trust
11:30–18:00 – How to find dividend growth stock ideas
18:00–26:00 – European vs US data challenges
26:00–32:30 – Valuation models and learning finance
32:30–38:00 – Regrets, missed opportunities, and lessons
38:00–41:30 – When to sell dividend stocks
41:30–47:20 – Stock picks and closing thoughts

Where to Go Next

If this episode helped clarify how to find dividend growth stocks, EP 06 – Let’s Talk About Q2 Earnings (2020) builds on this by showing how earnings results actually affect dividend safety. For a deeper dive into mistakes investors make early on, EP 08 – Our Dividend Investment Mistakes provides valuable context.

DISCLAIMER:Dividend Talk is not a licensed or registered investment adviser or broker/dealer. We are not providing you with individual investment advice on this site. Please consult with a licensed investment professional before you invest your money. This site is for entertainment, informational, and educational use only.Any opinion expressed on the site here and elsewhere on the internet is not a form of investment advice provided to you. We use information, data, and sources in the articles we believe to be correct at the time of writing them, but there is no guarantee of their accuracy, completeness, timeliness, or correctness. We are not liable for any losses suffered by any party because of information published on this site. Past performance is not a guarantee of future performance. By reading this site or subscribing to it, you agree that you are solely responsible for making investment decisions with your funds.