When we think of dividend stocks, we tend to think of large, stable companies such as American Express (NYSE:AXP), Home Depot (NYSE:HD), and United Technologies (NYSE:UTX). These blue chips are in the news every day, and they've powered portfolios for decades.

But American Express, Home Depot, and United Technologies aren't among the top five or 10 best dividend payers of the past decade (as measured by total return). In fact, the largest company in the top 10 is $9.7 billion pipeline firm Kinder Morgan Energy Partners -- and it's No. 6. The No. 1 dividend payer is a $1.9 billion office real estate investment trust (REIT) -- Corporate Office Properties Trust.

Five surprising returns
To make this list, the companies all had to be paying dividends in 1996 and 2006, and they had to have a current yield greater than 1%. Without further ado, here are the top five.

Company

Total Return

Corporate Office Properties Trust

1,956%

Cherokee (NASDAQ:CHKE)

1,832%

MDC Holdings

1,673%

Courier

1,567%

BP Prudhoe Bay Royalty Trust

1,507%

Data provided by Capital IQ. Performance from Nov. 26, 1996 to Nov. 26, 2006.

Another company, Gerdau (NYSE:GGB), has returned 3,361%, but it's only been trading on the NYSE since 1999, so it didn't make the cut. Still, the returns for this Brazilian steel company have been impressive. Of the companies that cracked the top five, only two, MDC Holdings and Corporate Office Properties Trust, currently have a market cap of more than $2 billion. Given the debt both firms employ, these two actually clock in with enterprise values approaching $3 billion.

As you may have already guessed, that means that all of these companies were small caps (meaning they had a market cap of less than $1 billion) a decade ago. But the dividends they paid didn't hamper their growth, and they rewarded investors with payouts even when the market was volatile.

Are any of these companies worth investing in now? The list above has three trusts (one REIT and two royalty trusts), and since trusts have seen quite a run-up in the past five years, I'd be cautious when considering those companies for investment.

That leaves us with MDC Holdings and Cherokee. I must admit that I find Cherokee's 6.9% yield intriguing, though I do worry about it being reliant on one customer, Target (NYSE:TGT). MDC Holdings, like many homebuilders, saw its shares nearly cut in half earlier this year. The company also trades at a P/E of 6 and a price-to-book ratio of just more than 1. The housing market may be in for more of a fall, and the company has already seen its shares increase about 38% from its low, but those multiples are a combination worthy of further research -- particularly when the company sports a 1.8% dividend yield.

The dividend wrap-up
It's not a complete surprise that the best returns among dividend payers would come from smaller companies. In fact, it's precisely what I expected, since it's easier for smaller businesses to achieve high growth rates for periods of five to 10 years.

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This article was originally published on Aug. 11, 2006. It has been updated.

At the time of publication, Nathan Parmelee had no financial interest in any of the companies mentioned. MDC Holdings is a Motley Fool Hidden Gems selection. Home Depot is a Motley Fool Inside Value selection. The Fool has adisclosure policy.