While there are a lot of ways to make money on Wall Street, few strategies offer superior long-term returns quite like buying dividend stocks.

Approximately 10 years ago, the wealth management division of banking giant JPMorgan Chase issued a report that compared the performance of publicly traded companies that didn't offer a dividend to those that initiated and grew their payouts over the course of 40 years (1972-2012). Predictability, the income stocks crushed the nonpayers in the return column: 9.5% annualized over four decades, compared to 1.6% annualized over the same timeline for the nonpayers.

Since dividend-paying companies are typically profitable on a recurring basis, can provide transparent long-term growth outlooks, and have often demonstrated their ability to navigate difficult economic environments, they're perfectly suited to increase in value over the long run.

Continue reading

Source Fool.com