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.
Tupperware, for example, has returned 62% since October 2005, and it’s currently rewarding investors with a 2.7% yield. Or consider HJ Heinz
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 110,000-plus members of our CAPS community:
|
Company |
Yield |
CAPS Rating (out of 5) |
|---|---|---|
|
Telkom Indonesia |
4.1% |
***** |
|
McDonald's |
2.7% |
**** |
|
General Electric |
4.6% |
**** |
|
Toyota |
2.4% |
**** |
|
Cal-Maine Foods |
9.8% |
***** |
Sources: Capital IQ, Yahoo! Finance, and CAPS as of July 3.
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 a couple of these dividend payers.
Sizzling Cal-Maine
Egg lovers like myself and Rocky Balboa have no doubt noticed how fast the price of eggs has been rising. And while it's been painful for us egg eaters (and drinkers, in Rocky's case), it's been pure joy for Cal-Maine Foods. Cal-Maine is the largest producer of eggs in the U.S., and the higher egg prices have made its financials shine.
True dividend aficionados may be wary of Cal-Maine, since its dividend history is about as tasty as cold eggs Benedict. It's only recently that the company boosted its payout by deciding to start paying a variable quarterly dividend. But though this may not be the most traditional dividend arrangement, it seems like a great way for the company to return a hefty amount of its newfound cash flow to shareholders without making a firm bet on the future of egg prices.
And while high egg prices may not last forever, Cal-Maine certainly seems confident in its business. Back in late June, the company picked up 2 million egg-laying hens and the Eggland’s Best brand -- among other things -- when it acquired Florida's Zephyr Egg.
Don't doubt the clown
And while we're on the subject of food, how about that Ronald McDonald? While Starbucks
Though McDonald's may not sport the huge dividend yield that the egg-slinging Cal-Maine does, dividend lovers will likely appreciate Mickey D's long, steady history of paying and growing its dividend.
The stock doesn't carry a perfect five-star rating on CAPS, but its 14-to-1 bull-to-bear ratio is no joke. Last month, when All-Star investor garyb52 gave McDonald's stock a thumbs-up, he said:
[McDonald's is] one of the most reliable companies to invest in, period. Strong global presence, especially in China and the emerging markets. It's only going to get better in the years ahead. And yes, McDonald's is an innovator. For example, they recently introduced an iced coffee which blows away Starbucks, in price and quality.
Get into the action
You can check out who else has been bullish on these stocks, 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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