Most investors like dividends because they desire an income stream. However, here's an even more important reason to like companies that pay investors: In a 40-year stretch from 1972 to 2012, companies that paid a dividend delivered a 7.2% total annual return, according to a study by Ned Davis Research. Contrast that with non-payers, which only produced a 1.6% yearly return over that time frame according to the study.
Even better, the study also found that dividend growers outperformed non-growers -- delivering a 9.5% total annual return -- while higher dividend-paying stocks outperformed lower- and non-dividend payers by about 3% annually. Given those findings, investors who already like dividends will love TransCanada (NYSE:TRP), Medical Properties Trust (NYSE:MPW), and Pattern Energy (NASDAQ:PEGI) because all three offer a fast-growing, high-yield payout. That combination makes them all the more likely to outperform over the long term.
Source: Motley Fool
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