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.
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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 our Motley Fool Income Investor service's mission.
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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 |
|
|---|---|---|
|
NYSE Euronext |
2.5% |
***** |
|
Nucor |
2.1% |
**** |
|
Precision Drilling Trust |
7.1% |
***** |
|
Sanofi-Aventis |
3.1% |
***** |
|
Duke Energy |
5.3% |
**** |
Source: Capital IQ,, Yahoo! Finance, and CAPS as of July 24.
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 NYSE Euronext.
NYSE shares the wealth
It's no mistake that you'll find NYSE Euronext on the Motley Fool Rule Breakers scorecard, but don't be small-f fooled. NYSE is no more a rule breaker than Jack Bauer -- neither have to break any rules, because they make the rules.
David Gardner's original Rule Breakers recommendation back in early 2005 was Archipelago Holdings, an up-and-coming electronic exchange that was getting in NYSE's hair. NYSE, with its voracious appetite, acquired Archipelago in a reverse takeover and became a public, for-profit company for the first time. Not quite satisfied there, the company spent $10 billion on Euronext, and then washed it down with the U.S.'s Amex exchange and a piece of Qatar's Doha Securities Market.
So today, you've got a massive exchange holding company with an average daily trading volume of more than $140 billion in 2007, and an aggregate market capitalization of $30 trillion. That total was larger than the London Stock Exchange, the Tokyo Stock Exchange, the Nasdaq
But of course, we're talking about dividends, so we have to consider that the NYSE has not been a publicly traded company for very long, and it's paid a dividend for an even shorter amount of time. However, the company produces a pile of cash with little need for capital expenditures, leaving a good deal of moolah behind for shareholders. Between that and the NYSE's solid competitive position, investors should feel pretty confident about the dividend and the potential for the company grow it over time.
Members of the CAPS community certainly seem to agree that the NYSE Euronext's stock is worth a look -- of the 2,222 members who've rated it, 2,151 think that the stock will outperform the S&P 500. CAPS All-Star goodjoel is one of those bullish members; he gave the stock a thumbs-up in May of last year, saying:
[NYSE] is taking the right steps to position itself for ... an increasingly global competitive environment. In particular the Euronext acquisition broadens [NYSE]'s geographic footprint, providing strong multi-asset exposure, and delivering product diversification
Get into the action
You can check out who else has been bullish on these stocks, and 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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