Quiz time, sports fans: What did the New York Yankees of the '50s and the Chicago Bulls and Dallas Cowboys of the '90s have in common? (And exactly how can this help you with your portfolio?)
It wasn't just that they had some of the best individual players of the time -- Yogi Berra, Michael Jordan, and Emmitt Smith, respectively -- although that certainly helped. And it wasn't just that they were able to bring home world championship trophies on a regular basis. It was simply that their organizations and performances were consistently excellent.
Consistent excellence is rare anywhere, but imagine seeing it in your portfolio. Impossible? No way! Because that's what carefully chosen dividend-paying stocks can offer.
Build the next investing dynasty
Finding these long-haul outperformers can help you build your fortune, as studies from investing gurus such as Jeremy Siegel have shown time and time again. Finding them for you is precisely what we do at our Motley Fool Income Investor service.
US Bancorp (NYSE: USB), for example, is up 36% since July 2004, and it is currently rewarding investors with a 4.7% yield. Then there's AllianceBernstein (NYSE: AB), which has returned 179% since June 2004 on top of a current 4.0% yield. And while both stocks happen to be Income Investor recommendations, you don't need to be a subscriber to get these great gains.
Identify new talent
With that last thought in mind, I'd like to introduce you to our new community intelligence database, Motley Fool CAPS. There, savvy investors help one another identify stocks that can create consistent and substantial growth for any type of investor. That means whether you're a Buffett-esque value investor or a chart-watching technical trader, you are welcome to strut your stuff. And, just as in professional sports, the cream inevitably rises to (and stays at) the top.
So what are the best dividend-paying stocks around, according to CAPS? Here are a few dividend picks with five-star ratings:
|
Company
|
Yield
|
|
EnergySouth (Nasdaq: ENSI)
|
2.4%
|
|
Capital Trust (NYSE: CT)
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7.0%
|
|
LaSalle Hotel Properties (NYSE: LHO)
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4.3%
|
|
Arcelor Mittal (NYSE: MT)
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2.0%
|
|
Seaspan Corp. (NYSE: SSW)
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6.9%
|
Sources: Capital IQ, Yahoo! Finance, and CAPS as of May 10.
Stake your claim
I encourage you to join CAPS to learn more about why investors are so bullish on these companies, and perhaps to add your own thoughts to the system. I'll get you started with some thoughts about one company here that may be worth checking out: Seaspan.
One of the first things that caught my eye about Seaspan was a recent Investor's Business Daily article titled "It Leases Out Giant Containerships That Deliver Asia's Products." And what an apt title -- that's exactly what Seaspan does!
Seaspan owns a fleet of 23 containerships that it leases out to various shipping companies. The company has been steadily growing its fleet and is currently contracted to purchase another 18 ships between now and the end of 2009. The average age of Seaspan's current fleet is 4.8 years, and the ships vary in size from 4,250 20-foot equivalent units (or TEUs, a standard measure for containers) up to 8,500 TEUs.
What makes Seaspan particularly interesting is the predictability of its business. The company works with some of the largest shipping companies in the world and secures long-term contracts -- most of which are 12 years in length -- that lock in the day rates for the ships. Seaspan also fixes its costs to the extent that it can, so it can recognize relatively consistent earnings from its seaborne assets.
The strategy seems to be working for Seaspan, as fleet utilization rates have stayed high, and revenue and earnings growth has been impressive. And with its long-term contracts and high contract termination fees, the company should continue to keep its head well above water even during the next downturn of the notoriously cyclical shipping market.
CAPS players seem to like what Seaspan is doing as well, and have rated the stock 88 to two in favor of outperform. CAPS All-Star GeorgieGirl36 notes the company's higher-than-industry margins and nice dividend. SSFD chimes in to note that Seaspan is a "good way to play China growth."
You can check out more of what others have to say about Seaspan, as well as chime in with your own thoughts, by heading over to CAPS. You may also want to check out a few of the other top-rated dividend payers above while you're there.
And looping back around to conclude my (very) extended sports metaphor, allow me to suggest that dividend stocks will help you turn your portfolio into the dependable New York Yankees, rather than the flash-in-the-pan Florida Marlins. And if you hate the Yankees, it's probably because they're so darn good, so darn often.
More CAPS coverage:
Yankees fan and Fool contributor Matt Koppenheffer hopes the Yanks can continue (regain?) their legendary excellence, and has his fingers crossed that the Cowboys will never get back to the top again. He does not own shares of any of the companies mentioned. The Fool's disclosure policy is a true investing dynasty.
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