Investing in higher quality companies that consistently raise dividends typically leads to outperformance in the stock market, according to research from S&P Capital IQ. S&P ranks companies by their dividend and earnings growth, and gives high marks to what it calls Dividend Aristocrats, which are companies that have increased their dividends for each of the past twenty-five years. There are currently about 60 companies in the S&P 500 which have done that, and investing in those companies have provided stellar returns. ‘By investing in them over the long haul an individual has done quite well,’ said Sam Stovall, U.S. Equity Strategist at S&P Capital IQ. ‘Since 1999, while the cumulative total return for the S&P 500 was about 80 percent, the cumulative total return for the Dividend Aristocrats was about 340 percent.’
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