Historically, companies that pay higher dividends materially outperform those that don't. In the last 36 years, dividend stocks outperformed the rest of the S&P 500 by 2.5% annually. And they outperformed nonpayers by nearly 8% each and every year, according to a study from NDR. That means that when a company actually increases its dividend, investors would do well to take notice.

Income investing is a philosophy that's been somewhat pushed aside since the tech boom of the late 1990s eschewed old-school dividend-payers for high-growth companies that plowed back their earnings to build their businesses. But in the two recessions that followed the dot-com bust, Wall Street has gotten an unpleasant reminder of just how profitable dividend-paying stocks can actually be.

Source: TheStreet.com


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