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5 Dynamic Dividend Stocks

The New York Yankees of the '50s and the Chicago Bulls and 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.

Windstream (NYSE: WIN  ) , for example, has returned 45% since January 2004, and it currently is rewarding investors with an 8.3% yield. Or consider Constellation Energy Group (NYSE: CEG  ) , which has returned 121% since June 2004, atop a current 2.2% yield. Although 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 110,000-plus members of our CAPS community:



CAPS Rating (5 Max)

Coca-Cola (NYSE: KO  )



Quality Systems (Nasdaq: QSII  )



AT&T (NYSE: T  )



Excel Maritime (NYSE: EXM  )



Magellan Midstream Partners (NYSE: MMP  )



Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and CAPS as of June 26.

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 Motley Fool Stock Advisor favorite Quality Systems.

Dependable dividends
Quality Systems is not your father's dividend payer. Though it's in the health-care space, it's a technology company, and a high-growth company at that. And the company doesn’t have much of a track record for dividend payment. It just made its first dividend payout in 2005 and didn't start making regular quarterly dividend payments until last summer.

But don't let that fool you. The company has its payout well covered. Quality Systems has more than $60 million of cash and marketable securities on its balance sheet and carries no debt. Even better, the company produces a handsome amount of cash from its operations and has few capital-spending requirements.

Think of the stock as the investing equivalent of Brad Pitt and Angelina Jolie. It's a marriage with beauty on both sides -- a good dividend yield on the one, and strong growth and the potential for capital appreciation on the other. And as the company's most recent quarter showed, the U.S. economic slowdown hasn't been able to put a damper on sales of its medical-practice software.

Quality Systems has also found itself among CAPS players' favorite stocks and carries a five-star rating. One of our Quality Systems bulls, CAPS All-Star NetscribeSoftware, gave the stock a thumbs-up in early 2007 and broke down why the future looks so bright:

The health care industry is changing rapidly, the providers are increasing their reliance on technology to help maximize the efficiency of business practices, improving patient care, and maintaining the privacy of patient information. Adding to it the positives of changing paper records to digital ones have induced various hospitals to become the center of technology adoption. However, the automation of medical records has just reached 14% of all U.S. physicians, thus leaving a huge room for growth in the industry where revenues are expected to grow [twofold] in [the] coming five years.

You can check out who else has been bullish on Quality Systems, 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:

Windstream and Constellation Energy are both Income Investor selections. Coca-Cola is an Inside Value pick. Quality Systems is a Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Yankees fan and Fool contributor Matt Koppenheffer hopes the Yanks can create some fireworks for their last year at Yankee Stadium, and he has his fingers crossed that the Cowboys never will 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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Related Tickers

10/21/2016 4:00 PM
QSII $11.86 Down -0.15 -1.25%
Quality Systems CAPS Rating: ****
CEG.DL2 $0.00 Down +0.00 +0.00%
Constellation Ener… CAPS Rating: *****
EXMCQ.DL $0.00 Down +0.00 +0.00%
Excel Maritime Car… CAPS Rating: ****
KO $42.13 Up +0.20 +0.48%
Coca-Cola CAPS Rating: ****
MMP $70.41 Down -0.51 -0.72%
Magellan Midstream… CAPS Rating: *****
T $37.49 Down -1.16 -3.00%
AT and T CAPS Rating: ****
WIN $8.37 Up +0.01 +0.12%
Windstream CAPS Rating: **