Ruth, Jordan, Montana. You don't have to be a sports fan to recognize those names, and there's a very good reason for that. All three of these athletes made magic happen whenever they competed. Even more importantly, when the chips were down, you could still count on these guys to deliver.
In times of economic turmoil, wouldn't it be great to have a performer like that in your portfolio? High-quality dividend payers can be just the kind of unshakeable all-star you're looking for.
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. At the same time, they can provide a solid defense against crazy market conditions. Finding them is the mission of our Motley Fool Income Investor service.
Kimberly-Clark (NYSE: KMB ) , for example, has beaten the S&P 500 by 21 points since April 2008, and it's currently rewarding investors with a 4.8% yield. Or consider Lancaster Colony (Nasdaq: LANC ) , which has topped the S&P by 51 points since November 2007, atop a current 2.7% 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 125,000-plus members of our CAPS community:
|
Company
|
Yield
|
CAPS Rating (out of 5)
|
|
Schlumberger (NYSE: SLB )
|
2.2%
|
****
|
|
Walt Disney (NYSE: DIS )
|
2.0%
|
****
|
|
Sun Hydraulics (Nasdaq: SNHY )
|
2.2%
|
*****
|
|
CME Group (NYSE: CME )
|
2.6%
|
*****
|
|
EnCana (NYSE: ECA )
|
4.0%
|
****
|
Sources: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS as of Feb. 19. Yields listed may not reflect recent corporate actions.
If you like what you see, but want more, you can run this screen for yourself with CAPS' handy screener. While these are not formal recommendations, they're a great place to kick off further research and potentially add some dividend excellence to your portfolio. I'll give you a head start with some thoughts on Sun Hydraulics.
Does my dividend have a glass jaw?
When it comes to dividends, Sun Hydraulics is small but mighty. Though we're talking about a company with a market cap of less than $300 million, it's as serious about its dividend as companies that are 10, 20, or, heck, 100 times its size. The company has kicked cash back to its shareholders every year since it went public 12 years ago.
We certainly live in tougher times now than when Sun Hydraulics hit the public markets in 1997, but its dividend remains tenacious. Free cash flow -- operating cash less capital spending -- over the years has consistently provided the company with more than enough cash to meet its payout. Even better, its most recent balance sheet showed $33 million in cash and equivalents, against less than $1 million in debt.
What the bulls say
It's easy to overlook a company like Sun Hydraulics, given that its business -- screw-in hydraulic cartridge valves and manifolds -- is a bit of a snoozer compared with some of the flashier companies out there. It's also a business that some might be inclined to skip, since it depends on activity in the industrial markets to keep up sales, and that activity hasn't been looking too hot lately.
Nevertheless, many CAPS community members believe the company is a good defensive play, thanks to its balance sheet and history of dividends. CAPS All-Star Southie1967 also looked ahead to the stimulus plan when giving the stock a thumbs-up back in January: "Industrial that will do well if the Obama Administration focus is on Infrastructure / packages must be passed towards this sector."
Get into the action
You can check out who else has been bullish on these stocks, and 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 Bad News Bears to the Dream Team. And really, could you argue with having Michael Jordan, Magic Johnson, and Sir Charles Barkley to help your portfolio chalk up wins?
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