According data from Goldman Sachs, dividend stocks tend to outperform their nondividend-paying counterparts by a considerable margin over time. A $10,000 investment in nondividend stocks in 1972 would have turned into $26,417 by 2013, while investing the same amount in dividend-paying stocks would have resulted in $413,073. That staggering difference provides solid evidence in favor of dividend investing. However, that's only part of the story: Results tend to be even better when investing in companies with consistent dividend growth.
Investing in dividend stocks can be a powerful and effective strategy to obtain superior returns over time. However, there is much more to successful dividend investing that simply going after companies with big yields. Disney (NYSE: DIS), Starbucks (NASDAQ: SBUX), and TJX (NYSE: TJX) show that investing in businesses with increasing dividends and healthy fundamentals can be the key to outperforming the markets in the long term.
Source: Motley Fool
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