Why Dividend Stocks Make Great Acquisitions

Dividend Investing is one of the most misunderstood investment strategies. This strategy tries to focus on companies which have strong brands, wide moats and a customer base which is willing to pay a premium for the product or service the company is providing. These quality characteristics allow select dividend stocks to generate growing earnings per share, and generate excess cash flows each year. This excess financial liquidity is what provides the fuel for a corporate culture, where dividends are increased every year.It is important to pay reasonable valuations for dividend growth stocks however, as buying them at ridiculous P/E ratios could lead to subpar returns over time. The nature of products and services that some of the best dividend stocks in the world deliver however makes them relatively immune from recessions. As a result, even during recessions and the bear markets caused by the recessions, these companies are able... Read more