Dividend Stocks You Can't Ignore

If you're looking for a clean corporate bill of health, dividend payouts might be the best clue you can find. According to research from Corporate Executive Board, dividend payers in the S&P 500 rallied an average of 8% higher last year than their nonpaying peers. That's some healthy outperformance. Yes, I'm talking about 2011, a year when the broad market effectively closed flat on the year. That means that dividend companies could have meant the difference between making gains last year or ending things in the red.

That's a pretty strong reason not to ignore dividend payers right now. The study I mentioned isn't the first time we've seen evidence that dividends go hand in hand with higher capital gains. In fact, that's been the case historically: Over the last 36 years, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while doling out cash to their shareholders, according to data compiled by Ned Davis Research. The numbers are even more compelling when looking at companies that consistently increase their payouts.

Source: The Street

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