5 Dynamic Dividend Stocks

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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.

France Telecom (NYSE: FTE), for example, has beaten the S&P 500 by 54 points since January 2006, and it currently is rewarding investors with a 7% yield. Or consider Johnson & Johnson (NYSE: JNJ), which has topped the S&P by 38 points since April 2006, atop a current 2.9% 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 115,000-plus members of our CAPS community:

Company	Yield	CAPS Rating (5 Max)
Walgreen (NYSE: WAG)	1.9%	*****
Texas Instruments (NYSE: TXN)	2.5%	****
Vale (NYSE: RIO)	3.8%	*****
Altria (NYSE: MO)	6.7%	*****
Automatic Data Processing (NYSE: ADP)	3.5%	*****

Sources: Capital IQ ( a division of Standard & Poor's) and CAPS as of Oct. 16.

Any one of these quality companies would add some dividend excellence to your portfolio, but let's take a closer look at why CAPS members think Automatic Data Processing is worth a hard look.

CAPS members weigh in
Despite the market's weakness and ADP's 25% drop since early September, CAPS members are running to -- rather than away from -- ADP's stock. Nearly 500 CAPS members have chimed in with their take on the stock, and more than 450 of them are thumbs-up on it.

CAPS member jawilde, one of those many ADP bulls and among the top 20% of all CAPS members, shared some of his thoughts on ADP earlier this month, when he rated it an outperformer:

I've tracked ADP for some time. Solid blue-chip company with a wide moat; it costs companies plenty to switch payroll processors. Some [vulnerability] to a recession but not bad. ... At present price, the ~3% dividend yield will help compensate for holding.

Since we're focusing on dividends here, some may wonder why we would key in on ADP and its 3.5% yield when there are a heck of a lot of companies out there sporting double-digit yields. Well, I wouldn't say that all stocks with double-digit yields are dangerous -- I have two of them in my own portfolio -- but I would say that right now is a great time to pick up some true stalwart stocks at valuations and with yields we wouldn't normally look at. And I think we need to have ADP on that list.

ADP is the 500-pound gorilla in the business of outsourcing of payroll and other HR activities. The services it offers are not only costly for companies to switch out of -- as jawilde noted -- but they also tend to save companies money over trying to take on the tasks themselves. That means that year after year, ADP can count on a pretty steady stream of service revenue -- even during tough economic times.

Oh, sure, it'll get pinched in a recession, but line ADP up against just about any cyclical business, and ADP will choke it out in the first round.

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.

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