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.

Enterprise Product Partners (NYSE:EPD), for example, is up 38% since March 2006, and it currently is rewarding investors with a 6% yield. Then there's ONEOK, which has returned 87% since November 2004 on top of a current 2.9% yield. And while both companies 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're 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 high CAPS ratings:


Forward Yield

CAPS Rating (out of 5)

Merck (NYSE:MRK)



McDonalds (NYSE:MCD)



Entergy (NYSE:ETR)



Waste Management (NYSE:WMI)






Source: Yahoo! Finance and CAPS as of Oct. 25.

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: Merck.

The safe haven called Merck
So first the market got all worried about the credit and housing situation over the summer. Then we got a little reprieve, the Fed cut rates, and everyone got happy and forgot about their worries. Now, we've got major financial institutions like Citigroup and Merrill Lynch reminding us that, oh yeah, things are still pretty bad.

So how does this bring us to Merck? Well, as investors feel the shockwaves reverberate out in their direction, they're going to start poking through their portfolio to try to limit their potential exposure. That means that solid, if not exciting, stocks like Merck will suddenly look even more prudent.

But that's not the only reason to like Merck -- CAPS All-Stars have found a variety of reasons why this company is a worthwhile portfolio addition:

  • TMFBreakerJava noted last summer that "large caps are back in fashion."
  • Jerseypoorboy said that Merck has a "good pipeline of drugs" and the stock is a "good long term investment."
  • Martynanasi thinks that Merck is a "much better company today than 5 years ago and they 'get it.'"

You can check out who has been bullish on Merck, 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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.