Last week, chewing gum powerhouse William Wrigley Jr. Co. made a major announcement — it was being acquired by privately-held Mars Inc. Even more interesting: Warren Buffett’s Berkshire Hathaway, an investor with keen investing insight, would be financing the deal.

We were elated by the news, especially because we’ve been highlighting Wrigley in our Dividend Superstars special report “Seven Stocks to Triple Your Income Over Time” Heck, as soon as the buyout news hit the wires, the shares rocketed toward the offer price.

Since the initial release of that report, Wrigley’s stock is up 33.7% (including reinvested dividends). Not bad for a conservative stock that has been doling out regular (and increasing) dividend checks since the 1920s! And even better when you look at what the S&P 500 has done over the same period — from June 4 of last year through yesterday, the broad stock index posted a total return of 7%.

But even if you missed out on the Wrigley action, don’t worry. In this post, we’ll tell you about three important lessons from this transaction:

Lesson #1. When it comes to stocks, look for big brand names, solid product lines, and a global reach.

A lot of investors overlook one simple fact: When you buy a stock, you’re not buying a lottery ticket … you’re buying a stake in a business. If you can’t understand the business, you probably shouldn’t invest. And if you wouldn’t want to own the business for any length of time, you definitely shouldn’t invest in it! You can see why we advocate investing in companies that already sell terrific (and terrifically popular!) items around the world … companies that are easy to understand … companies that have strong brands … and companies that consistently share their profits with shareholders through dividend payments.

Lesson #2. Even in this lousy credit environment, there are still big deals being done.

Profitable businesses selling at attractive prices will always be hot. And savvy investors will always be willing — and able — to buy them lock, stock, and barrel.

Lesson #3. When it comes to investing, patience and conviction are rewarded.

Investing is about steady returns over time. Taking a longer-term approach lets you ride out the market’s bumps, and positions you for the big, sudden gains. As the Wrigley deal proves, a huge up move can come out of nowhere. If you tried to trade in and out of the shares, you likely would have missed that HUGE one-day pop!

To your dividend investing success,

InvestingInDividends.com

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