5 Dynamic Dividend Stocks

Ruth, Jordan, Montana. You don't have to be a sports fan to recognize those names, and there's a very good reason for that. All three of these athletes made magic happen whenever they competed. Even more importantly, when the chips were down, you could still count on these guys to deliver.

In times of economic turmoil, wouldn't it be great to have a performer like that in your portfolio? Well, high-quality dividend payers can be just that kind of day-in and day-out all-star that you're looking for.

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. At the same time, they can provide a solid defense against crazy market conditions. Finding them is our Motley Fool Income Investor service's mission.

Unilever (NYSE:UL), for example, has beaten the S&P 500 by 32 points since February 2005, and it currently is rewarding investors with a 5.4% yield. Or consider National Grid, which has topped the S&P by 41 points since July 2005, atop a trailing dividend yield of 6.5%. While these stocks happen to be Income Investor recommendations, you don't need to be a subscriber to get these great gains.

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 125,000-plus members of our CAPS community:

Sources: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS as of Feb. 11. All yields listed are trailing and may not reflect recent corporate actions.

If you like what you see, but want more, you can run this screen for yourself using the handy CAPS screener. While these are not formal recommendations, they're a great place to kick off further research and potentially add some dividend excellence to your portfolio. In fact, I'll even kick you off with some thoughts on Bristol-Myers Squibb.

Does my dividend have a glass jaw?
Though Bristol-Myers carries a $6 billion-plus slug of debt, I can't say I'm too concerned about the company's balance sheet. Not only is the debt more than covered by the company's $7 billion in cash and equivalents, but its profit from operations more than covers its interest expense.

That cash pile could also come in handy in backstopping the dividend payout, as Bristol's cash flow after capital spending hasn't left its dividend a whole lot of breathing room over the past few years. That may be reason to keep an eye on the company's cash levels, but probably not a reason to worry -- the drug maker has been making sure its investors get their payday for well over 20 years now.

What the bulls say
Right now, a dividend-paying pharmaceutical giant may seem like a gimme and a risk all at once. On the one hand, sales of life-saving drugs are going to laugh in the face of economic instability. But at the same time, the pharmaceutical industry has been in flux and the generic drug manufacturers seem to make further inroads all the time.

Bristol-Myers is tackling this threat by trying to turn itself into a more agile and efficient company, while focusing on key disease areas such as Alzheimer's, cancer, hepatitis C, and heart and blood conditions. At the same time, the company could benefit from confusion in the industry as pharma giants try to decide whether they want to be buyers or sellers.

CAPS member Jersey17 recently became one of the 1,000-plus CAPS members to give Bristol-Myers a thumbs-up, writing:

Solid compnay with a ton of cash on hand. They are positioned well right now and could soon be making an acquisition to improve growth or could possiblly be acquired by [Pfizer (NYSE:PFE)] or [Merck]. Until our economy turns this is a good defensive play with a strong dividend.

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 Bad News Bears to the Dream Team. And really, could you argue with having Michael Jordan, Magic Johnson, and Sir Charles Barkley help your portfolio chalk up wins?

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