Dividend investing is a tried-and-true strategy for building long-term wealth. A company that maintains a stable and healthy dividend is one that will continue to pay you over time, regardless of how the market zigs and zags. After all, most of the stock market's gains in recent decades have come from dividends.

In order to find dividend studs like Anheuser-Busch (NYSE:BUD), which returned 11% annual returns over the past decade, respectively, I used our new CAPS screening tool to look for companies that pay a strong dividend. Below are five companies with dividend yields of 4% or more.

They also have:

  • Market caps greater than $1 billion.
  • Five-star ratings, the highest possible, from our CAPS community.

Remember, in the first 20 months for which we have data, five-star companies outperformed the S&P on average by 12% annually.


Recent Share Price


Market Cap (in billions)

Dividend Yield

Gerdau (NYSE:GGB)


Basic Materials



GlaxoSmithKline (NYSE:GSK)


Health Care



Nordic American Tanker Shipping (NYSE:NAT)





San Juan Basin Royalty Trust (NYSE:SJT)





Tata Motors (NYSE:TTM)


Consumer Goods



Data from Motley Fool CAPS, Yahoo! Finance, and adr.com as of Sept. 29.

Of course, this screen is only a starting point in the research process. When selecting dividend payers, Fools know it's important to make sure a company has sufficient free cash flow to sustain and grow its dividends for years to come.

Come and join us on Motley Fool CAPS to dig into these companies further. Let our 115,000-strong (and counting) CAPS community help you make better stock selections.

On Oct. 7, 2008, Fool Co-Founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Ilan Moscovitz doesn't own shares of any companies mentioned. He thinks the CAPS screen is the new four square. Tata Motors Ltd. is a Motley Fool Global Gains pick. GlaxoSmithKline is a Motley Fool Income Investor recommendation. The Fool's disclosure policy calls spikes.