Latest market data reveals that dividend growth investing is outperforming fixed income returns, with Q1 2024 ETF inflows into dividend growth funds surging 12% year‑over‑year. Top performers include Microsoft and PepsiCo, each announcing double‑digit dividend increases backed by solid EPS growth. The growth opportunity for Energy Transfer might be better than you think, too. The MLP has a substantial project backlog focused on driving growth. In particular, the demand for electricity fueled by natural gas is growing by leaps and bounds, with data centers hosting artificial intelligence (AI) systems driving much of this growth. You might be surprised to hear that the Morningstar US Dividend Growth Index, and other dividend growth strategies as well, score below the broad stock market on measures of corporate “quality” today. Dividend growth stocks currently fall short of the Morningstar US Market Index in terms of profitability, financial strength, and returns on capital. The Morningstar US Dividend Growth Index also has less exposure to “wide moat” businesses, though it also has less exposure to “no moat” companies and more exposure to “narrow moat.” Dividend growth investing metrics from Morningstar indicate that firms with payout ratios below 60% have higher sustainability in dividend growth. For 2024, Johnson & Johnson and Costco fit this profile, supported by stable revenue expansion and healthy balance sheets.