The New York Yankees of the '50s and the Chicago Bulls and Dallas Cowboys of the '90s had one crucial element in common: consistent excellence in their organizations and performance. That's a rare accomplishment, but if you think it could never occur in your portfolio, think again. Carefully chosen dividend-paying stocks could be your key to superstar returns.

Build the next investing dynasty
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 such stocks is our Motley Fool Income Investor service's mission.

Petroleo Brasileiro (NYSE: PBR), for example, has returned more than 110% since August 2007, and it's currently rewarding investors with a 1.6% yield. Or consider Enterprise Products Partners (NYSE: EPD), which has returned 69% since May 2004, atop a current 6.5% yield. 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 the help of Motley Fool CAPS, we'll search for the best dividend-paying stocks around. Here are several dividend picks that have also earned high ratings from the 86,000-plus members of our CAPS community:



CAPS Rating (5 max)




American Eagle Outfitters (NYSE: AEO)



Merck (NYSE: MRK)



Xilinx (Nasdaq: XLNX)



Novartis (NYSE: NVS)



Source: Capital IQ, Yahoo!Finance, and CAPS as of March 13.

Any of these quality companies would add some dividend excellence to your portfolio, but I thought I'd kick off further research with a look at Stock Advisor recommendation American Eagle.

A fashionable price?
Like many of its retail comrades, American Eagle has been hit hard during the recent market downturn, and it is sitting 45% below its 52-week high. A lot of the slump has been from the same gloomy factors that have trounced everything else: falling retail sales, retreating consumer confidence, and goblins. There's no consensus on the goblins yet, but the market finds new things to fear every day, so I figure they're fair game.

With little or no exposure to SIVs, CDOs, ABSs, CLOs, MBSs or any other combination of finance-related letters, current economic conditions shouldn't imperil American Eagle's business over the long term. Even in the near term, it's not as though the company is struggling to bring in customers. The 2% year-over-year revenue growth in its most recent quarter may not have been impressive, but the company brought in almost $1 billion in sales, and it posted a solidly profitable 13% net income margin.

Current worries, though, present the possibility that investors give too much weight to the near term and become willing to sell the stock at bargain prices. In American Eagle's case, you can pick up shares right now for just 9.5 times its trailing earnings, well below the company's more typical multiples in the mid-teens to mid-20s. And of course, investors willing to wait out the tough times with American Eagle are also collecting a yield that's close to the current yield on five-year U.S. treasury notes.

On CAPS, All-Star slbutton is one of the 2,034 players who see American Eagle as a good deal. This player gave the stock a thumbs-up last fall, and wrote earlier in the week:

A trailing P/E of 9 is cheap for this company. Management is making all the right moves, controlling inventory and trying to get women's fashion back on track. Gross margin is still in the mid-40's, even with some discounting and a small drop in same-store sales.

Dividend stocks could help you transform your portfolio from the flash-in-the-pan Florida Marlins into the dependable New York Yankees. And if you hate the Yankees, it's probably because they're so darn good, so darn often.

More CAPS Foolishness:

Petroleo Brasileiro and Enterprise Products Partners are Income Investor recommendations, and American Eagle is a pick from Stock Advisor. The Motley Fool owns shares of American Eagle. You can test-drive Income Investorfree for 30 days.

Yankees fan and Fool contributor Matt Koppenheffer hopes the Yanks can continue their legendary excellence (maybe this year!), 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. The Fool's disclosure policy is a true investing dynasty.