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 them is the mission of our Motley Fool Income Investor service.

Health Care REIT (NYSE:HCN), for example, has returned more than 84% since September 2003, and it is currently rewarding investors with a 5.6% yield. Or consider Unilever (NYSE:UL), which has returned more than 63% since February 2005, atop a current 3.1% 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 105,000-plus members of our CAPS community:



CAPS Rating (out of 5)

American Capital Strategies (NASDAQ:ACAS)



Public Service Enterprise Group (NYSE:PEG)






Dominion Resources (NYSE:D)



Waste Management (NYSE:WMI)



Sources: Capital IQ, Yahoo! Finance, and CAPS as of May 30.

Any one of these quality companies would add some dividend excellence to your portfolio, but I thought I'd kick off further research with a closer look at Inside Value pick Waste Management.

Dependable dividends
As we know, not all dividend payers and dividend payouts are created equal. For that reason, it's important to make sure that the dividend you're expecting isn't about to take an extended vacation with the dodo bird. To figure this out, I like to look at the prospects for the company's business, the company's history of paying dividends, and the sustainability of the current dividend.

As far as stable businesses go, waste collection is way up there. Through good economic times and bad, people are going to be throwing out garbage, and they're going to be paying someone to come and take it away. Sure, there's competition in the waste collection business, but it’s not like the 2008 class of Harvard MBAs is dreaming about the trash pickup business they're going to start when they graduate. In other words, Waste Management has a rock-solid business.

When it comes to Waste Management's dividend, it's worth noting that between 1999 and 2003, the company pretty much turned the dividend spigot off as it went through a big restructuring that led to a string of (non-cash) losses. Since the restructuring, the business appears to be on sound footing and is -- as always -- producing gobs of cash. In recent years, it's generated far more cash than it needs to pay out its dividend, and has been returning even more cash to shareholders through billions of dollars’ worth of share buybacks.

On CAPS, the stock carries a top-shelf five-star rating and has a fan club of nearly 700. One of those bulls, CAPS All-Star volumewhiz, has been on board with Waste Management since late 2006 and said:

[Waste Management] is a cash flow king. They print money and seem to have used it wisely. The paradigm shift for any new buyers is that [Waste Management's] new division, its energy division, is actually making money now, recovering usable methanol from the waste gases at its dump sites. It's an alternative energy stock!!

You can check out who else has been bullish on Waste Management, 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.

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.

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