The New York Yankees of the '50s and the Chicago Bulls and the Dallas Cowboys of the '90s had one crucial element in common: consistent excellence in their organizations and performance. That's a rare accomplishment, but if you think it could never occur in your portfolio, think again. Carefully chosen dividend-paying stocks could be your key to superstar returns.
Build the next investing dynasty
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 is our Motley Fool Income Investor service's mission.
Invesco (NYSE: IVZ ) , for example, has returned more than 94% since October 2004, and is rewarding investors with a 3.0% yield. Or consider ONEOK (NYSE: OKE ) , which has returned 81% since November 2005, atop a 3.0% yield. These two stocks happen to be Income Investor recommendations.
Identify new talent
With the help of Motley Fool CAPS, we'll search for more of the best dividend-paying stocks around. Here are several dividend picks that have also earned high ratings from the 85,000-plus members of our CAPS community:
|
Company
|
Trailing Yield
|
CAPS Rating
(5 max)
|
|
Cemex (NYSE:CX)
|
2.9%
|
*****
|
|
E. I. du Pont de Nemours (NYSE:DD)
|
3.3%
|
****
|
|
Linear Technology (:LLTC)
|
2.6%
|
****
|
|
Barclays (NYSE:BCS)
|
7.9%
|
****
|
|
StatoilHydro (NYSE:STO)
|
5.0%
|
*****
|
Source: Capital IQ, Yahoo! Finance, and CAPS as of March 6.
Any one of these quality companies would add some dividend excellence to your portfolio, but I thought I'd kick off further research with a closer look at Global Gains recommendation Cemex.
Cementing the globe
With the U.S. housing crash making new headlines nearly every day, it may be surprising that Cemex is so highly regarded in the CAPS community. Near-term demand for cement will almost certainly take a hit, particularly in major U.S. markets for Cemex like California. At the same time, there's a lot of new capacity coming on line in the cement industry that could compound the problem.
But as fellow Fool David Lee Smith pointed out at the end of last year, cement pricing in the U.S. has been holding up so far, and there are larger markets like public works that gobble up cement at a greater clip than housing. Meanwhile, many Fools have noticed that Cemex is extremely well positioned in its industry -- at home and globally -- and in the bigger picture likely will outperform the pessimistic outlook that the market has set for it.
InvestorDeb, one of the 2,818 CAPS players who have recommended Cemex, thinks that the market has overreacted and priced the company's stock too low, in this pitch written just yesterday:
The market is valuing Cemex based on fear (to be fair, the market fears just about everything today ... ) Cemex is a leader in a hated sector, which makes it cheap. Buy 1/3 or 1/4 of a position right here, right now ... You have a real chance of owning a multibagger in 5 years.
You can check out who else has been bullish on Cemex, 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.
Dividend stocks could help you transform your portfolio from the flash-in-the-pan Florida Marlins into the dependable New York Yankees. And if you hate the Yankees, it's probably because they're so darn good, so darn often.
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