More often than not, dividend stocks are the foundation of great portfolios and the X factor that leads to the creation of long-term wealth. That’s because dividend stocks offer investors a variety of advantages.
For starters, dividend stocks are a beacon of profitability and have, historically, run circles around their non-dividend-paying peers. This makes sense given that a company is unlikely to pay a recurring dividend if it’s not profitable and doesn’t have a time-tested business model.
Furthermore, dividend stocks can help calm skittish investors during inevitable stock market corrections.
Most important, though, is the fact that dividend income can be reinvested back into more shares of dividend-paying stock in a repeating pattern via a dividend reinvestment plan (DRIP). This leads to larger dividend payments and