Wall Street offers investors an assortment of pathways to make money. However, few strategies have been more successful over the long run than buying and holding dividend stocks.

Last year, Hartford Funds released a report that thoroughly examined the ins and outs of dividend stocks over extended periods. In particular, a collaboration with Ned Davis Research found that income stocks averaged a 9.18% annual return over a half-century (1973-2022), with dividend growers and initiators really packing a punch (10.24% annualized return). For comparison, the annualized return of the equal-weighted S&P 500 came in at 7.68%, while the average annual return of non-payers was a mere 3.95% over the same timeline.

Hartford Funds' findings shouldn't be all that surprising. Businesses that pay continuous dividends tend to be profitable on a recurring basis and, in many instances, they can provide transparent long-term growth outlooks. In short, they're just the type of companies you'd expect to see grow in value over lengthy periods.

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Source Fool.com