Maximizing Long-Term Returns With Dividend Stocks

There are many aspects of dividend growth investing that I value. These include the focus on companies with sustainable competitive positions, the ability to earn tax advantaged income and most importantly for me, the ability to achieve financial independence. Not losing any of my investment capital is my Rule No 1. If I have my money in a business that is paying increasing dividends, it is also likely that the business is growing earnings and increasing cash flow.

In order to consistently increase earnings and dividends over a long period time, it is highly likely that the business has some sustainable competitive advantage and unique value proposition. In my opinion, I'll have the best chance of preserving my capital if I have it sitting in a business with strong barriers to entry and good cash generation. Businesses like McDonald's Corp. (MCD), Coca-Cola Company (KO) and Procter & Gamble Co. (PG) have solid brand and business advantages that I expect to continue indefinitely.

Source: Seeking Alpha

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