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.
National Grid (NYSE: NGG), for example, is up 67% since August 2005, and it is currently rewarding investors with a 3.8% yield. Then there's JPMorgan (NYSE: JPM), which has returned 30% since August 2005 on top of a current 3.5% yield. And while both these 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:
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Company
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Yield
|
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Southern Copper (NYSE: PCU)
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5.9%
|
|
Fording Canadian Coal Trust (NYSE: FDG)
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7.1%
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Statoil (NYSE: STO)
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1.9%
|
|
Quintana Maritime Limited (Nasdaq: QMAR)
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6.7%
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|
Alumina (NYSE: AWC)
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3.6%
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Sources: Capital IQ, Yahoo! Finance, and CAPS as of Sept. 6.
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: Southern Copper.
It's been a volatile couple months for Southern Copper's stock since the last time I took a look at it. As the rest of the market got jittery and hit the deck, so did Southern Copper. At its low point, it closed down 24% from where it was when I covered it.
Since then, the stock has rallied in a big way; it is now less than 1% below its price of a couple of months ago. If you didn't get your hands on some Southern Copper shares when it took its dive (and drove up its dividend yield), CAPS players seem to think that the stock is still ripe for the picking now. DemonDoug, one of CAPS' top players, recommended the stock at the beginning of August, saying simply, "[I'm] very late to the game on this one, but ... it's still going to outperform." Freemoney101, another All-Star Southern Copper bull, likes the "solid fundamentals" and dividend yield and calls the stock "a no brainer."
Though there are a total of 1,994 Southern Copper bulls versus just 68 bears, some do think the stock isn't well-positioned right now. One of those bears, FoxyPicker, thinks a lot of the bullishness on the stock is because of the expected Federal Funds Rate cut. She is going against the crowd, though, and predicting that the Fed will not cut rates this month, and that this will have a direct impact on Southern Copper.
You can check out more of what others have to say about Southern Copper, 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.
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