5 Dynamic Dividend Stocks

The New York Yankees of the '50s and the Chicago Bulls and Dallas Cowboys of the '90s have 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.

AllianceBernstein (NYSE: AB  ) , for example, has returned more than 111% since August 2004, and it's currently rewarding investors with a 6.5% yield. Or consider Partner Communications (Nasdaq: PTNR  ) , which has returned 29% since May 2007, atop a current 5.7% yield. While 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 the help of Motley Fool CAPS, we'll search for the best dividend-paying stocks around. Here are several dividend picks that have also earned high ratings from the 95,000-plus members of our CAPS community:

Company

Yield

CAPS Rating

Johnson & Johnson (NYSE:JNJ)

2.5%

*****

Diana Shipping (NYSE:DSX)

8.9%

*****

MarkWest Energy Partners (NYSE:MWE)

7.1%

*****

Teck Cominco (NYSE:TCK)

2.3%

*****

The Governor and Company of The Bank of Ireland (NYSE:IRE)

6.5%

*****

Source: Capital IQ, Yahoo! Finance, and CAPS as of April 3.

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 Teck Cominco.

I zinc, therefore I am
If we were to have a steel cage match right now and pit the tag team of the U.S. dollar and the short-term U.S. Treasury against zinc and copper, it could get ugly. Though the dollar may have found some firmer footing over the past few days, its performance over the past year has been pretty lousy and inflation hawks think things could get worse. Meanwhile, this sinking currency coupled with resource gobbling global growth is jacking up the prices for natural resources like our zinc and copper tag team.

While there are plenty of places where we can see higher natural resource prices taking their toll (like every time I have to fuel up my car), there are also a lot of companies, like Teck Cominco, that are benefitting from the trend. Teck Cominco is a producer of a variety of natural resources, though copper, zinc, and coal make up the lion's share of its revenue. The high prices and growing global demand over the past few years have catapulted the company's financials: Teck's net income has risen from just $8.2 million in 2002 to more than $1.6 billion in 2007. And though the company can't control metals prices, it is hoping that exploration activities and acquisitions will help boost production.

On CAPS, some players are chasing Teck as simply a way to play the broad metals group. Others, though, like Radioman101, have noticed Teck's importance in the zinc market. Radioman had this to say about Teck mid-year last year:

These guys are the major zinc producer. London Metal Exchange stocks of zinc are down to just 2.5 days consumption. That's a pretty tight supply. China is soaking up metals like a sponge. Any spike in demand or supply deliver problem will spike prices. Any company that can get zinc to the market place would profit from premium prices. Metals are still on a long term bull market. It's not too late to jump onboard.

You can check out who else has been bullish on Teck, 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.

More CAPS Foolishness:


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