Historically speaking, one of the smartest wealth-building strategies on Wall Street is to trust in dividend stocks. Companies that offer a regular payout to their shareholders are usually profitable on a recurring basis and time-tested.

Even more important, income stocks have demonstrated their ability to outperform over long stretches. Roughly 10 years ago, J.P. Morgan Asset Management, a division of money-center bank JPMorgan Chase, released a report that compared the performance of publicly traded companies that didn't pay a dividend to those that initiated and grew their payouts between 1972 and 2012. The result of this 40-year look back was a 9.5% annualized return for the dividend-paying companies and a paltry 1.6% annualized return for the non-payers.

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Source Fool.com