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. If you think that rare accomplishment 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.
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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 (max 5) |
|---|---|---|
|
Qualcomm |
2.0% |
**** |
|
Wyeth |
3.5% |
**** |
|
Walter Industries |
2.2% |
**** |
|
Occidental Petroleum |
2.5% |
***** |
|
Seagate Technology |
10.9% |
**** |
Source: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS as of Nov. 26.
Any one of these quality companies would add some dividend excellence to your portfolio. Let's take a closer look at why CAPS members think Seagate Technology is worth a hard look.
A driving force in computer storage
A double-digit yield from a tech company? That may sound about as likely as George W. Bush and Nancy Pelosi becoming new best friends, but it's not a typo. Mr. Market has been a harsh critic across the board lately, and Seagate has received more than its share of pessimism.
On CAPS, Seagate hasn't reached the top five-star level yet, but it does sport 760 outperform ratings, against just 41 underperforms. CAPS player techpatriot, who claims to have been watching Seagate "since a 20 MEGABYTE drive sold for over $900 USD," recently weighed in on the company:
...The PC market will be weak for a couple of years, but people are still going to need to store more and more information, not less of it, no matter what happens. Some demand may trail off, as this stock is not recession proof, but hanging onto a few hundred shares could really supercharge your portfolio when the market gets back on track. Buy it below $12 and hold it till $18 or so. Steal it at it's current price of $-5-6. ....This stock could be a 5 year five-bagger at these prices. Flash media? - Not going to happen anytime soon for a variety of reasons, (except low power netbooks). Do some industry research.
CAPS All-Star and fellow Seagate bull jdawg1847 also chimed in recently, focusing primarily on the company's financials: "Largest maker of computer hard drives yields 10%, has a $9 book value and $2.5 per share in cash."
It seems tough to argue with either take. Though prices are constantly coming down on storage devices, the volume of digital information seems to continue growing by leaps and bounds. At the same time, the information stored has become more important, demanding higher reliability. And while the disk-drive industry used to have a glut of competitors, today Seagate remains one of the few left standing.
Stiff headwinds for Seagate are no surprise in this recessionary period, but its balance sheet appears to be conservative enough to weather the current turmoil. Even though analysts expect the company's profit per share to drop 70% for its fiscal year ending next June, the stock is currently trading at less than six times those lowered expectations.
Get into the action
See who else has been bullish on these stocks, and chime in with your own thoughts, by heading over to CAPS. While you're there, you may also want to check out a few of the other top-rated dividend payers above.
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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