The Power of Dividend Investing – Visual Capitalist – 02/06/18

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The Power of Dividend Investing

The advantages of dividend investing are as follows:

  • Companies can increase dividends over time. (P&G, for example, has increased their dividend every year for 60 years)
  • Companies can’t fake dividends – a company either declares a dividend, or it doesn’t
  • Dividends protect against inflation. (Dividends have increased 4.2% since 1912, and inflation has increased 3.3%)
  • Dividends create intrinsic value, as they generate cash flow for investors
  • Dividends can help combat volatility – that’s because dividend yield increases as the market price of a stock falls, making the stock more attractive

Dividends are a key way for companies to give back to shareholders, and in the right situation, dividend stocks can be a powerful component in an investor’s portfolio.

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