Tax treatment. Qualified dividends are taxed at the long-term capital gains rate, which means that everyone, except those in the top income bracket, will be paying 15% or less. However, some stock and foreign share dividends are taxed as ordinary income.
Value investing. Dividend stocks are typically characterized as value stocks. Researchers have found that bargain-priced value stocks have outperformed growth stocks over the long-term.
Dividend discipline. Companies are reluctant to cut dividends. Regular dividend payments help keep managers on track and think more carefully on company spending.
For more information on dividends, visit our dividend ETFs category.
Max Chen contributed to this article.