Quiz time, sports fans: What did the New York Yankees of the '50s and the Chicago Bulls and Dallas Cowboys of the '90s have in common? (And exactly how can this help you with your portfolio?)
It wasn't just that they had some of the best individual players of the time -- Yogi Berra, Michael Jordan, and Emmitt Smith, respectively -- although that certainly helped. And it wasn't just that they were able to bring home world championship trophies on a regular basis. It was simply that their organizations and performances were consistently excellent.
Consistent excellence is rare anywhere, but imagine seeing it in your portfolio. Impossible? No way! Because that's what carefully chosen dividend-paying stocks can offer.
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Finding 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 for you is precisely what we do at our Motley Fool Income Investor service.
Diageo
Identify new talent
With that last thought in mind, I'd like to introduce you to our new community intelligence database, Motley Fool CAPS. There, savvy investors help one another identify stocks that can create consistent and substantial growth for any type of investor. That means whether you're a Buffett-esque value investor or a chart-watching technical trader, you are welcome to strut your stuff. And, just as in professional sports, the cream inevitably rises to (and stays at) the top.
So what are the best dividend-paying stocks around, according to CAPS? Here are a few dividend picks with five-star ratings:
|
Company |
Yield |
|---|---|
|
Oil-Dri Corp. of America |
2.7% |
|
Saul Centers |
2.8% |
|
Industrias Bachoco |
2.2% |
|
Packaging Corp. of America |
4.0% |
|
Collectors Universe |
3.5% |
Stake your claim
I encourage you to join CAPS to learn more about why investors are so bullish on these companies, and perhaps add your own thoughts to the system. I'll get you started with some thoughts about one company here that may be worth checking out: Saul Centers.
Part of the reason Saul Centers jumped out at me was the fact that the stock is not very heavily followed. Only three Wall Street analysts track the stock, two of them being Robert W. Baird & Co. and Ferris Baker Watts. After downgrading Saul back in December, Baird just recently upped its outlook for the stock from neutral to outperform. Though Baird isn't one of the top Wall Street firms that we track on CAPS, it's still ranked in the top 30% of CAPS players.
So far, Baird has been on target; the stock has ticked up slightly while the overall market has hit the skids. Over the past five years, though, the outperformance has been even more marked for Saul -- the stock has gained more than 250%, versus 30% for the S&P over the same time. And, of course, you can stack that return right on top of the consistent dividend the stock pays. Though multiple expansion has played a big part in this return, the company has grown net income by about 67% over that time.
Business-wise, Saul develops and manages shopping center and office properties, primarily in Virginia and Florida. The company's shopping centers are those great grocery-store-anchored centers where you can find just about anything from Safeway for your groceries to H&R Block for your tax prep needs. Though I've been really impressed with how well the new mixed-use "urban center" areas have done (such as San Jose's Santana Row, owned by Federal Realty Trust), the kind of traditional suburban shopping centers Saul Centers manages will undoubtedly continue to be a popular destination to load up on anything and everything.
You can check out more of what others have to say about Saul Centers, 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.
And looping back around to conclude my (very) extended sports metaphor, allow me to suggest that dividend stocks will help you turn your portfolio into the dependable New York Yankees, rather than the flash-in-the-pan Florida Marlins. And if you hate the Yankees, it's probably because they're so darn good, so darn often.
More interesting income Foolishness:
- Check out this Dividend Discount valuation.
- How big are your dividends?
- Look out for risky dividends.
Diageo and Citizens Communications are Income Investor picks. Take a 30-day free trial to find out why.
Yankees fan and Fool contributor Matt Koppenheffer hopes the Yanks can continue (regain?) their legendary excellence, and has his fingers crossed that the Cowboys never get back to the top again. He does not own shares of any of the companies mentioned. The Fool's disclosure policy is a true investing dynasty.
