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 the mission of our Motley Fool Income Investor service.
National Grid
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 115,000-plus members of our CAPS community:
|
Company |
Yield |
CAPS Rating (out of 5) |
|---|---|---|
|
Chevron |
3.2% |
**** |
|
ConocoPhillips |
2.7% |
***** |
|
Yum! Brands |
2% |
**** |
|
Waste Management |
3.2% |
***** |
|
Taiwan Semiconductor |
4.4% |
***** |
Sources: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS as of Sept. 19.
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 a couple of these stocks.
Fried chicken all over the globe
Barbados -- it's small, it's beautiful, and it was a great place for me to escape the crazy markets for a week (even if I could still watch CNN). One thing that Barbados lacks, though, is easy access to fast food -- not that I'm complaining. If you have the itch, you can stop by Barbados' home-grown fast food chain, Chefette, or you can grab a quick slice of pizza at Pizza Man Doc. But if neither of those suits your craving, you can tuck into some good ol' fried chicken at none other than KFC.
If Yum! Brands has managed to do anything particularly well, it's making its presence known around the world. The company owns the KFC, Taco Bell, Pizza Hut, Long John Silver's, and A&W restaurant concepts and has peppered the globe with more than 35,000 units in over 100 countries. KFC alone accounts for nearly 15,000 of these units, and more than 60% of those chicken shacks are located outside the U.S. -- including more than 2,000 in China.
Though the company has only been paying dividends since 2004, it's been steadily raising the payout every year. This fast-food giant produces cash like nobody's business, so it has more than enough coin to cover its capital spending and dividends, and then buy back stock on top of that. So while the current dividend yield won't knock anybody's socks off, we should be able to expect further growth in the future.
Though Yum! hasn't landed the top five-star rating in CAPS, its four-star status definitely makes it worth consideration. CAPS All-Star TotoMMB, one of the nearly 1,600 Yum! bulls on CAPS, rated the stock an outperformer back in December of 2007 on the expectation that the company would handle the economic turmoil well and that the dividend would be a nice kicker:
Solid company with smart growth. Ranks in the upper tier of many financial stats, yet middle of the road P/E compared to industry. Regular dividend growth makes it attractive in the long-term. Along with McDonald's
(NYSE:MCD) , should weather the global financial turmoil just fine. Better growth than S&P over the next 1-2 years.
Get into the action
You can check out who else has been bullish on these stocks, 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:
