From 1928 to 2014, dividend-paying stocks outperformed non-dividend-paying stocks by nearly 2%, but that edge has slipped since 2008. John Buckingham, CIO of Al Frank Asset Management, notes that dividend-paying stocks tend to follow the fortunes of value stocks. Growth companies tend to invest more of their cash flow into their businesses, whereas value companies are often more mature and thus able to pay dividends. While dividend-paying equities are often viewed as bond substitutes and have historically been significantly less volatile, Buckingham says “dividend payers have lagged” recently, “despite the perception that what the Fed has done has inspired retirees to run into dividend-paying stocks.” The relative performance of these stocks reflects recent market history. They underperformed toward the end of the 1990s, bottoming in 2000 and beginning to shine thereafter, until they fell again during the 2008-09 financial crisis. Dividend payers recovered their edge in 2011-12, but have slipped since.