Dividend stocks are widely regarded as reliable sources of capital gains. However, a closer look at the topic shows that the Dividend stocks that perform the best over long periods are those that consistently increase their payouts. These stocks are often referred to as "Dividend growers" in the financial literature.

This finding is based on two factors. First, companies that steadily grow their cash distributions to shareholders often sport high-quality businesses with strong fundamentals, a wide economic moat, and stellar management. Second, shareholders who faithfully hold onto dividend-grower stocks and reinvest the dividend every quarter benefit from the power of compounding.

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Source Fool.com