The 80/20 rule, also known as the Pareto principle, says 80% of the results come from 20% of the causes. In the world of business, smart companies exploit this effect by zeroing in on the smallest, most lucrative parts of their sector. Then they make their investors rich by exploiting the most profitable 20% of activities, leaving the hard work to others.
Over the long haul, which firm do you think is most likely to have rewarded its shareholders better? The answer, of course, is the company that has figured out the concept of 80/20. McDonald’s Corp (MCD) presents a textbook example. By focusing on only the most profitable part of the fast food business, the company enjoys 80% of the industry’s profits while fronting only 20% of the capital. That makes this one top dividend stock for buy-and-hold investors to consider.
Source: Income Investors
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