How does PADI work

PADI stands for Projected Annual Dividend Income. It represents the projected annual dividend income of a portfolio and provides an indication of how much dividend income can be expected over the coming year based on current holdings and expected dividend payments.

What is PADI?

PADI is an estimate of total annual dividend income, calculated based on:

• The number of securities held
• The expected annual dividend per security
• Current dividend policies and historical dividend payments

Within PDT, the most recently known dividend data is used. If future dividend payments are not yet available, they are estimated based on historical dividend data (up to 10 years). This provides a realistic estimate of the dividend income a portfolio may generate over the next year.

Why is PADI useful?

PADI provides a clear overview of how much dividend income a portfolio can generate annually. This is useful for:

• Income planning – for example when dividends are used as (supplementary) income
• Tracking growth over time – monitoring PADI shows whether dividend income is increasing or decreasing
• Portfolio decisions – purchases, sales, or dividend changes directly affect PADI

How is PADI calculated?

For each security in the portfolio, the expected annual dividend is multiplied by the number of securities held. These amounts are then added together.

The calculation is based on expected dividend payments and historical patterns. Dividend increases or cuts that are not yet known are not included.

PADI growth

PADI growth shows how much the total annual dividend income of a portfolio is growing. It is calculated using the CAGR method.

PADI growth takes into account:

• Dividend increases or decreases
• Changes in the number of securities held
• Purchases and sales within the portfolio

Example:

If PADI increases from €1,000 to €1,500 in one year, the PADI growth is 50%. PADI growth therefore reflects how quickly passive dividend income is growing across the entire portfolio.

Dividend growth

Dividend growth shows how much the dividend per security has grown per year. This is also calculated using the CAGR method, but without taking the number of securities held into account.

Dividend growth focuses solely on:

• The development of the dividend per share or security
• The dividend policy of individual companies

Example:

If a company’s dividend increases from €2 to €3 per security in one year, the dividend growth is 50%.

Dividend growth therefore reflects the quality and growth strength of the dividend itself, independent of portfolio size.