Would you like to know the worst-kept secret on Wall Street? Stocks with dividends that grow outperform stocks that don't pay dividends by a mile.

It stands to reason that companies committed to returning profits to shareholders outperform companies that don't. That said, the differences are probably more striking than you imagine. Data from Ned Davis Research and Hartford Funds shows that dividend growers and initiators delivered a 10.7% annual return during the period from 1973 through 2021. That's significantly better than the 8.2% return the S&P 500 index delivered over the same time frame and heaps better than the 4.8% return non-dividend-paying stocks delivered.

Image source: Getty Images.

Continue reading

Source Fool.com