The Truth About Dividend Stocks

The startling truth about dividend stocks is this: Their performance destroys that of their nondividend-paying brethren. It's as simple as that. In two paragraphs, I'll prove this to you, and then conclude with three dividend stocks you can use to start profiting from this lucrative reality.

Let's start with a look at the most recent year. As of today, the S&P 500 ETF (NYSE: SPY), an exchange-traded fund that tracks the performance of the S&P 500, returned 2.6% over the past 52 weeks. The SPDR S&P Dividend ETF (NYSE: SDY), an exchange-traded fund that tracks the performance of S&P's Dividend Aristocrats, returned 7.8% over the same time period, a full 5.2 percentage points better. Moreover, the latter ETF emphasizes some of the oldest and most established (i.e., boring) corporations in America such as Procter & Gamble, Coca-Cola, and McDonald's -- certainly not what you'd think of as highfliers.

Source: Motley Fool

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