"Do you know the only thing that gives me pleasure? It's to see my dividends coming in." 

-- John D. Rockefeller

Mr. Rockefeller's words resonate now, as investors, professional and amateur, stare at the market's abyss, wondering how to generate returns. Since price appreciation is no longer a viable option for producing returns in the short term, investors are turning to stocks with high dividend yields to eke out returns.

Dividends can be a sign of a company's financial health, but be sure to examine the viability of the business beneath the financials and its general performance in downturns. The underlying business can clue an investor in as to whether a company’s dividend is sustainable. For example, the health care or utilities sectors generally weather the worst times better than cyclical sectors like technology.

In this macro environment, investing in stocks such as Medical Properties Trust (NYSE:MPW), which yields 17.6%, gives you a solid return sans price appreciation. The yield should remain intact, since the company’s underlying business should weather the recession. Medical Properties develops health-care facilities and leases them to health-care companies. It also underwrites mortgages for health-care operators, which are collateralized by their real estate. Because health-care companies aren’t likely to default on their mortgage payments, as people continue to pay health-care bills in a recession, Medical Properties’ revenue streams should continue flowing. However, some may argue that being exposed to commercial property puts the revenue flow at risk.

These days, roughly one-third of publicly traded companies in this country continue to pay a steady dividend. Mature companies that have more cash than they need are often some of the strongest ones out there.

How do you find solid companies with such high dividend yields? I did the dirty work for you using the Motley Fool's CAPS screener. To search for stocks with hefty dividends, I screened for companies with:

  • A minimum dividend yield of 5%.
  • Market caps of $250 million or greater.
  • Five-star ratings, the highest possible, from our 125,000-member CAPS community.

After running the screen, here’s what I came up with:


Market Cap

Dividend Yield

Amerigas Partners (NYSE:APU)

$1.81 billion


Atlas Energy Resources (NYSE:ATN)

$941 million


Brookfield Infrastructure Partners (NYSE:BIP)

$307 million


Medical Properties Trust

$302 million


Omega Healthcare Investors (NYSE:OHI)

$1.2 billion


Philip Morris International (NYSE:PM)

$75.2 billion


Data from CAPS as of Feb 2, 2009. Yields may not reflect recent company events.

However, just because a company doles out dividends now, that doesn't necessarily mean it always will. Companies are increasingly becoming more cash-constrained.

Take Dow Chemical (NYSE:DOW), for example. The chemical goliath boasts a dividend yield of 14.5%. However, the largest U.S. chemical company is missing crucial ingredients in its beaker, which could pose a threat to its dividend. The chemicals space has lost its luster as the global recession has halted the production of products that use chemicals as inputs, such as the production and manufacturing of plastics and agricultural equipment. To that, add Dow’s unraveled $17.4 billion joint venture with Kuwait’s Petrochemical. All of this could put pressure on the current dividend. In fact, the company's CEO recently raised the possibility of cutting the dividend.

In short, dividends are one way to search for quality companies, but it's important to dig deeper and see if that investment is right for your portfolio. The above table is a great place to start, but you really need to keep up-to-date with dividend payers, since many continue to cut their payouts in this cash-centric environment. Start your search today at Motley Fool CAPS.

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Jennifer Schonberger does not own shares of any of the companies mentioned in this article. Atlas Energy Resources is a Motley Fool Income Investor recommendation. Brookfield Infrastructure Partners is an Inside Value selection. The Motley Fool has a disclosure policy.