While stocks beat out every other asset class in generating wealth, dividend stocks are the premier investment strategy. Over the four decades between 1972 and 2012, companies that initiated and raised their dividends outperformed all other stocks that didn’t pay dividends. Income-generating stocks returned 9.5% annually over the study period, compared to the meager 1.6% returns of non-payers.
There is a reason for this outperformance. Companies that pay dividends tend to be profitable and successful over many years. Having been tested in the crucible of numerous business cycles, they know how to maneuver through turbulent times.
This post appeared first on InvestorPlace.