I know I've said this before, but it's downright ugly out there. Wall Street is in a full-scale panic. Way too many homeowners are underwater on their mortgages. The Dow is dramatically off its high of just more than a year ago, and stock markets around the world are posting similar returns. News stories aren't sure whether this is stagflation, recession, or the beginning of the next Great Depression.

But if you step away from the financial market, things don't look so bad. They don't look so good, true, but they aren't nearly as dire as all that. The unemployment rate is still reasonable, at 6.5% (the Great Depression saw levels closer to 25%); gasoline prices are finally starting to recede; and food price increases are finally moderating.

Even if you look at the corporate world, once you step away from companies heavily dependent on raising new money in the credit markets, there's good news to be had.

Panic-free companies
Even with the market meltdown in full swing, there are still strong companies serving their customers and rewarding their shareholders. For instance, both retailing titan Wal-Mart (NYSE:WMT) and smaller operator Casey's General Stores (NASDAQ:CASY) just reported same-store sales gains.

In fact, on a day the Dow Jones Industrial Average was busy falling another 679 points, one company announced plans to raise its dividend. Kinder Morgan Energy Partners, along with its conjoined twin Kinder Morgan Management, announced that it expected to raise its payout to $1.02 per quarter -- up from its most recent quarterly distribution of $0.99, and well above the $0.88 it handed unitholders for the same period last year.

In a market like this, a dividend hike takes guts, confidence, and tremendously strong, reliable cash flow. Yet even that news apparently fell on deaf ears; Kinder Morgan stock still managed to fall nearly 2%, finishing the day with an annualized dividend yield greater than 9.4%. (It's now at 8%.) When the market panics, it panics everywhere.

A way to wait it out
A company with strong performance may see its stock price hammered, based on nothing more than market panic. But as long as its dividend payments are based on real cash thrown off from real operations, they should remain unaffected.

Getting paid somewhere in the neighborhood of 8%-9% to wait for the panic to subside makes living through that panic far more bearable. Of course, not every company will offer such a tempting incentive for you to buy its shares, and then sit around waiting for a recovery. But those that do can provide you with tremendous opportunities.

Even if oil pipelines aren't your idea of an ideal investment, Kinder Morgan isn't alone among companies with strong dividends. Just take a look at these companies and their recent dividend activities:


Dividend Yield

Recent Dividend Action

Community Trust Bancorp (NASDAQ:CTBI)


Increased it 3.4%

Hudson City Bancorp (NASDAQ:HCBK)


Increased it 8.3%

Goodrich (NYSE:GR)


Increased it 11%

Aqua America (NYSE:WTR)


Increased it 8%

Vornado (NYSE:VNO)


Increased it 5.6%

That list contains two banks that are maintaining their dividends amid one of the largest financial meltdowns in history. It also has a handful of companies that have posted significant dividend increases, even while the economy is supposedly in shambles. That's pretty much the definition of operational strength, financial fortitude, and dedication to shareholders.

The power of the payout
Increasing dividends, or at least maintaining them, demonstrates the underlying strength of a company's business -- no matter what its share price does. And in a market in which losers get a $700 billion bailout package and winners see their stock prices halved, well, it's a good sign of where the individual investor ought to be looking.

That's why dividends are our primary focus at Motley Fool Income Investor. If a company can buck the trends of a market meltdown, financial collapse, and general economic malaise, and still pay its owners well, it's worth owning. If you're ready to own the kind of companies that have the best chance of overcoming the worst macroeconomic conditions, click here for a 30-day free trial. There's no obligation to subscribe.

This article was first published Oct. 16, 2008. It has been updated.

At the time of publication, Fool contributor Chuck Saletta owned shares of Kinder Morgan Management. Wal-Mart is an Inside Value recommendation. The Fool's disclosure policy never panics -- well, almost never.