In most cases, dividend stocks form the basis for a successful long-term investment portfolio. They also tend to significantly outperform stocks without dividends over time.
But beyond sheer outperformance, dividend stocks bring three benefits that investors appreciate. First, dividend stocks generally have proven business models and relatively clear long-term prospects – otherwise they would not share a percentage of their profits with shareholders. Second, dividend payouts serve to partially hedge against the inevitable "turbulence" in the stock market. Finally, dividends can be reinvested in more stocks that pay dividends, which increases your ability to build wealth.