The beauty of dividend stocks is that they don't only provide recurrent income and stable returns for investors, growing dividend payments over the long term are a clear reflection about a company's fundamental qualities and cash flow generation capabilities, for this reason, dividend stocks tend to generate outstanding returns for investors over time.

With this in mind, let's take a look at Procter & Gamble (NYSE:PG) to go over three important reasons why the consumer staples giant is one of the top dividend stocks in the market.

Rock-Solid competitive strengths
When It comes to competitive strengths in the consumer sector, Procter & Gamble is second to none. The company owns an enormously valuable portfolio of leading brands in different consumer staples categories, including 23 brands making more than $1 billion in global annual revenues each and 14 additional brands making between $500 million and $1 billion per year, many of which are on their way to becoming billion-dollar brands in the middle term.

Source: Procter & Gamble

Some of the most notable names in Procter & Gamble's portfolio are widely recognized household favorites such as Ariel, Gillette, Pantene, Pampers and Charmin, among many others. Procter & Gamble sells products everyone needs on a recurrent basis, which provides stability to the company's cash flows through good and bad economic times, a very important characteristic when selecting the best dividend stocks.

In addition to extraordinary brand power, Procter & Gamble benefits from its gigantic scale and a wide-reaching distribution network which sets it apart from the competition.

Unilever (NYSE:UL) is arguably Procter & Gamble's most direct competitor on a global scale, and the company has made considerable inroads in emerging markets over the last several years. However, Unilever reported sales for $12.7 billion Euros in the second quarter of 2014, roughly $16.1 billion at current exchange rates. In comparison, Procter & Gamble delivered $20.2 billion in revenues during the same period, so the company has a considerable size advantage in its industry.

Accelerating growth and profitability
Being a market leader in stable and mature product categories, it's not easy for Procter & Gamble to generate growth. But management is not resting on its laurels; the company is implementing a series of initiatives to reinvigorate financial performance

Procter & Gamble will be selling between 90 and 100 of its smaller and underperforming brands, retaining its most promising strategic names. The company plans to keep between 70 and 80 core brands, which together account for approximately 90% of sales and 95% of profits. CEO AG Lafley explained during the last earnings conference call the rationale for this decision:

"This new streamlined P&G should continue to grow faster and more sustainably and reliably create more value. Importantly, this will be a much simpler, much less complex company of leading brands that's easier to manage and operate. This simplicity will significantly focus investment and resource allocation and enable execution."

Procter & Gamble is embarked in an ambitious productivity program aimed at reducing costs by $10 billion over the next several years via all kinds of cost saving initiatives. Management believes the company is not only in track to achieve, but even to exceed that goal.

Source: Procter & Gamble

Consistent dividend payments
Procter & Gamble has a truly amazing track-record of dividend payments. The company has paid uninterrupted dividends since its incorporation in 1890, which means 124 consecutive years of reliable dividends for investors. In addition, Procter & Gamble has increased distributions during the past 58 years in a row; this includes a 7% increase for 2014.

The company has distributed mountains of cash to investors over time, Procter & Gamble has paid $51.1 billion in dividends and allocated $52.9 billion to share repurchases for a total cash distribution of $104 billion through the last decade.

PG Dividend Chart

PG Dividend data by YCharts

Procter & Gamble produced $13.96 billion in operating cash flows during the year ended on June 2014, while capital expenditures amounted to $3.85 billion, so free cash flow was $10.11 billion. Dividend payments absorbed only $6.9 billion over the year, so the company has more than enough financial strength to continue raising dividends over time.

The dividend yield stands at approximately 3.1% at current prices, not bad at all coming from a rock-solid dividend juggernaut it times of historically low interest rates.

The bottom line
High quality dividend stocks have proven their ability to deliver attractive returns with limited risks over the years. Procter & Gamble offers undisputed competitive advantages, a dynamic management team focused on maximizing shareholder value and impressive financial strength. This makes the company a top dividend stock to buy and hold for the long term.