Ask a Fool: Dividend Stocks

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who writes, "I like dividend payers. Over time do they perform as well as other stocks?"

Brendan notes that there are historical studies that dividend payers do outperform the market -- particularly those with a high yield and low payout ratio because those are stocks that are likely to raise their dividends over time. Of course, Brendan doesn't like to invest based on historical studies of broad classes of stocks. But the great thing about dividend payers is it's cash in your pocket, and it's a strong sign that the company is generating cash to pay out to shareholders. Jason agrees on transparency, and he asks Brendan what he thinks of dividends versus share repurchases. 

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