Quiz time, sports fans: What do 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.
National Grid, for example, is up 70% since August 2005, and it is rewarding investors with a 3.8% yield. Then there's JPMorgan Chase, which has returned 32% since August 2005 on top of a current 3.5% yield. And 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 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 |
|---|---|
|
ConocoPhillips (NYSE:COP) |
2.1% |
|
CNOOC (NYSE:CEO) |
2.9% |
|
Tata Motors (NYSE:TTM) |
2.3% |
|
NuStar Energy (NYSE:NS) |
6.2% |
|
Partner Communications |
4.1% |
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: Tata Motors.
It's a tough time to be an investor in the auto industry. There's plenty of coverage about how poorly U.S. automakers have been doing, but even the stocks of foreign manufacturers like Tata Motors, Honda Motor (NYSE:HMC), Toyota Motor (NYSE:TM), and Nissan (NASDAQ:NSANY) have gotten significantly cheaper lately. Tata, for instance, is down around 26% since early this year, and Toyota has lost 18%.
Of course, those losses pale in comparison to what the U.S. players have been taking. This year, Daimler finally got its U.S. monkey off its back by selling 80% of its American brand, Chrysler, to private equity firm Cerberus. Ford, meanwhile, sold off one of its premium brands, Aston Martin, this year, and now is on its way to selling off both the Jaguar and Land Rover brands, and potentially also Volvo.
The troubling times for U.S. automakers could be a boon for some of their foreign competitors. Ford's interest in selling Jaguar and Land Rover could represent a good opportunity for an up-and-comer like Tata Motors to put down a bigger footprint in the global market. To this point, Tata's chairman has publicly stated that the company is interested in the Ford brands to help the Indian company expand its markets. While Tata certainly isn't the only one interested in Ford's sale -- India-based Mahindra & Mahindra and private equity firms TPG, Ripplewood, and Cerberus have all expressed interest -- recent turmoil in the U.S. debt market could dampen the bids from the private equity players.
But the potential for Tata to buy Jaguar and Land Rover is hardly the only reason to take note of Tata. The fact that the company is based in one of the most dynamic world economies is a big plus. The company is also, as CAPS player SteppenWulf points out, working on building a $2,500 car. SteppenWulf thinks that "success in creating a profitable low-cost car could give [it] a lock in a lot of emerging markets in Asia, Eastern Europe, and other markets," and continues, "[Tata] is a company with a lot of promise, trading right now at the bottom of its range."
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:
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 will get back to the top again. He does not own shares of any of the companies mentioned. Nissan is a Global Gains recommendation. The Fool's disclosure policy is a true investing dynasty.
