Over the past few weeks, I’ve been revealing to StreetAuthority.com readers how my research team and I honed in on “The 10 Stocks to Own For the Rest of Your Life.”

#-ad_banner-#I explained how “Irreplaceable Assets” can shower investors with increased wealth for the long haul here and how we use a very unique set of criteria to find the “World’s Greatest Businesses” here.

But there’s still one more vital trait that we used to find our elite group of “Forever Stocks.”
See, perhaps more than anything, my Forever Stocks have an obsession with paying shareholders rich, growing dividends.

As an investor, this makes perfect sense. Since 1926 nearly half of the market’s total return came from dividends, according to Standard & Poor’s research.
 

In other words, if you ignore dividends, then your potential for long-term growth is cut in half.

You’d also be ignoring some of the market’s best performers. From January 1972 through March 2014, dividend-paying stocks in the S&P 500 returned 9.3% on average annually, according to Ned Davis Research. That far exceeds the 2.4% annual return for S&P stocks that didn’t pay a dividend.

 

 

But here’s the thing…

Most people don’t realize that dividends aren’t the only cash-friendly move a company can make.

On top of regular dividends, Forever Stocks also reward shareholders with what I like to think of as “Tax-Free Dividends.”

These payments are a favorite of Warren Buffett and many other billionaire investors. In fact, there’s a good chance you’ve received one of these Tax-Free Dividends before and didn’t even realize it.

That’s because companies don’t pay them in the normal way. They do so by buying back shares of their own stock.

You see, when a company buys back its own stock, it’s similar to paying you a dividend. A buyback makes every share you own more valuable, but you don’t have to pay taxes on your new portion of ownership.

On top of that, studies show that the share price usually rises afterward.

Stocks with the biggest buybacks returned nearly four times more than the market over the previous decade, according to a 2012 study by U.K.-investment group Shore Capital.

One of the easiest ways to capitalize is through PowerShares Buyback Achievers ETF (NYSE: PKW). This fund invests in companies that bought back more than 5% of their shares over the past year.

Even with the market posting some of its best years ever, this fund outperformed the S&P 500 over the past five years.

 

 

 

 

But as good as dividends and buybacks are on their own, the returns get even better when you combine them.

In a comprehensive study covering most of the 20th century, fund manager James O’Shaughnessy found that the companies that spent the most on dividends and buybacks beat the market at large.

 

 

 

 

That’s why my research team and I placed such strong emphasis on companies that pay Tax-Free Dividends when we put together our list of “10 Stocks To Own For the Rest of Your Life.”

One elite company, in fact, is the most shareholder-friendly firm I’ve ever seen: Philip Morris International, Inc. (NYSE: PM).

Not only has Philip Morris raised its dividend 104% since 2008, it also bought back 456 million shares (about 22% of all shares outstanding). The company plans billions more in share repurchases this year and continued dividend increases in the years to come.

In fact, Philip Morris has raised its dividend each and every year for the past 45 years straight. Not surprisingly, the company has consistently beaten the market since it went public.

 

 

 

 

And Philip Morris isn’t even close to slowing down. It continues to dominate a global market and plans to repurchase approximately $14 billion of stock over the next two years.

But it’s not the only one…

Another one of my 10 Forever Stocks just bought back $3.9 billion in stock. And it’s also increased its dividend a staggering 633% in the past two years.

Yet another has raised its dividend 463% since 2004 and it bought back more than $20 billion worth of its shares over the past three years alone.

 

 

 

 

These are the kinds of companies that can reward you in good times and bad. Their shareholder-friendly policies support the share price and put cash in your pocket no matter what.

Bottom line: investing in stocks that return billions of dollars to their shareholders via both dividends and buybacks is essential if you’re looking for consistent, steady gains year after year.

So now you know the three little-known qualities of Forever Stocks: Irreplaceable Assets, the World’s Greatest Wide-Moat Businesses and companies that reward shareholders by paying billions in both dividends and Tax-Free Dividends.

They’ve allowed my 10 Forever Stocks to deliver market-beating gains for years and are poised to continue showering investors with wealth for the next several decades.

The best part: there’s never been a better time than now for you to start investing in them.

I don’t have time to tell you about all of my Forever Stocks right now, but if you want to learn more about the companies I discussed above, you’ll want to check out my new live presentation called, “The 10 Stocks to Own For the Rest of Your Life.”

I recently gave this lecture to a group of investors at St. Edward’s University in Austin, Texas and I revealed even more information about several of my elite Forever Stocks — including several names and ticker symbols.

Get all the details now by watching a taping of my live presentation here.