Historically the stocks that have been paying dividends and increasing them has outperformed the return of the ones without dividends. Obviously, since a stock holder receives a dividend from the stock, but the actual stock has better valuation and returns.
Companies with persistent dividend growth have also exhibited strong fundamentals when compared with companies that do not pay dividends. This is true of earnings, revenue, free cash flow (FCF), margins and return on equity (ROE). Historically, all these variables have been higher for the dividend growers. As we can see by the following chart, U.S. companies outside the farm and financial industries are currently sitting on a record pile of cash and liquid assets. At the same time, they are boosting dividends.
My question to you guys is there other trends like this that you have seen historically to be true?
