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.

Build the next investing dynasty
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.

Sonoco Products (NYSE:SON), for example, is up 84% since June 2004, and it is currently rewarding investors with a 2.3% yield. Then there's Enterprise Products Partners (NYSE:EPD), which has returned 79% since June 2004 on top of a current 5.7% yield. And while both stocks happen to be Income Investor recommendations, you don't need to be a subscriber to get these great gains.

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:



Omega Navigation (NASDAQ:ONAV)






XL Capital (NYSE:XL)


American Ecology Corp. (NASDAQ:ECOL)


Sources: Capital IQ, Yahoo! Finance, and CAPS as of April 26.

Stake your claim
I encourage you to join CAPS to learn more about why investors are so bullish on these companies, and perhaps to 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: American Ecology Corp.

Hazardous waste disposal is a dirty business, but somebody's got to do it, and American Ecology is all over it. The company works for private-sector companies and the government cleaning up radioactive, hazardous, and industrial waste. American Ecology has two segments, operating disposal facilities and non-operating disposal facilities. Of the two, only the operating facilities generate any profit for the company.

Within the operating facilities segment, the company has ongoing business with some of its customers, which it refers to as its "base business," and one-time cleanup projects which make up its "event business." Part of American Ecology's strategy is increasing the size of its base business, which accounted for 48% of the company's revenue in 2006, while also attracting new cleanup projects. Because of the amount of fixed expense in the disposal industry, stable, recurring business can help the company cover overhead expenses and add to its operating leverage.

CAPS players seem to like American Ecology because of the stability of its business and the industry as a whole. Many of them see it as the kind of stock that you can stick in your portfolio and still sleep very soundly at night.

  • CAPS All-Star FreethinkerKW shares: "[American Ecology has] no debt, $11 million of cash on the books, it's a 55 year old company, and it pays a quarterly dividend of 15 cents ... The owners own 18% of company, and institutions own 66.6% ... This is a 'buy,' not a 'strong buy,' but a 'buy and forget' ... The big reason I like this most: handles hazardous waste, which is sure to grow as more nuclear plants come online in the USA."
  • Another All-Star, pennysplants, adds: "A very healthy company in a very healthy sector. Value with growth and income. A nice anchor in a conservative long-term portfolio -- just hang tight. Purchasing at a sufficient discount makes it an almost worry-free investment."

You can check out more of what others have to say about American Ecology, 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 CAPS coverage:

Hungry for more great dividend payers? Check out Motley Fool Income Investor free for 30 days.

Yankees fan and Fool contributor Matt Koppenheffer hopes the Yanks can continue (regain?) their legendary excellence, and has his fingers crossed that the Cowboys will 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.