Updated: February 28, 2016
Stocks that raise their dividend meaningfully every year will make you a lot of money over the long haul… provided they continue to boost their payouts, of course.
Studies by two global investment heavyweights, BlackRock and GMO, have shown that 90% of U.S. equity returns over the past 100 years have been thanks to dividends and dividend growth.
Ned Davis Research also conducted its own 43-year study on stock returns (from January 1972 through December 2014). The conclusion? Dividend payers are good… but dividend growers are great. Stocks that paid a growing dividend delivered double-digit returns and outpaced steady dividend payers by nearly one-third:
Annual Rate of Return (Ned Davis Research)
Over time, this compounding really adds up as these stocks pull away from stagnant payers and the market at-large:
Dividend Growers Pull Away Over Time
Worried about the Fed’s rate cycle?… Read more