The CAPS Screen: 5 Dividend Dynamos

Dividend investing is a tried-and-true strategy for building long-term wealth. A company that maintains a stable and healthy dividend is one that will continue to pay you over time, regardless of how the market zigs and zags. After all, most of the stock market's gains in recent decades have come from dividends.

With this in mind, I used our new CAPS screening tool to look for companies that pay a strong dividend. Below are 10 companies with dividend yields of 4% or more.

They also have:

  • Market caps greater than $1 billion.
  • Five-star ratings, the highest possible, from our CAPS community.

Remember, in the first year for which we have data, five-star companies outperformed with an average gain of nearly 28%.

Company

Sector

Share Price

Market Cap (in billions)

Yield

Advantage Energy Income Fund (NYSE: AAV  )

Financial

$12.99

$1.8

10.9%

BP (NYSE: BP  )

Basic materials

$73.56

$231.4

4.4%

Diana Shipping (NYSE: DSX  )

Services

$32.98

$2.5

10.3%

Harvest Energy Trust (NYSE: HTE  )

Financial

$24.45

$3.7

14.8%

Permian Basin Royalty Trust (NYSE: PBT  )

Financial

$23.89

$1.1

10.1%

Data from Motley Fool CAPS and Yahoo! Finance.

Remember, this screen is only a starting point in the research process. When selecting dividend payers, Fools know it's important to make sure a company has sufficient free cash flow to sustain and grow its dividends for years to come.

Come and join us on Motley Fool CAPS to dig into these companies further. Let our 105,000-strong (and counting) CAPS community help you make better stock selections.

For more Foolery:

Ilan Moscovitz doesn't own shares of any companies mentioned. He thinks the CAPS screen is the new four square. The Fool's disclosure policy calls spikes.


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