Last year, I wrote about the Dividend Achievers, companies tracked in an index that have increased their dividends annually over the past 10 years, which also meet certain liquidity requirements. At that time, there were roughly 300 companies listed. As you might expect, the recent tough economic environment has booted some of those companies out of the index.

The list for 2009 features 283 companies, with 63 removed and 23 added. Not surprisingly, 80% of the deletions were financial, insurance, or real estate companies, including American International Group (NYSE:AIG).

Anyone who knows the secret of dividends knows why it's worth paying attention to resilient dividend payers. A huge portion of your long-term returns from stocks come not from rising share prices, but from the dividends they pay out. Indeed, the Dividend Achievers index outpaced the S&P 500 over the past three, five, 10, 15, and 20 years (ending Dec. 31, 2008).

Here are a few of the Dividend Achievers index's components:

  • Automatic Data Processing (NYSE:ADP), with consecutive dividend hikes over the past 34 years.
  • Otter Tail (NASDAQ:OTTR), which has paid dividends without interruption since 1938.
  • Illinois Tool Works (NYSE:ITW), with consecutive dividend increases over the past 44 years.
  • Johnson Controls (NYSE:JCI), with consecutive dividend hikes over the past 34 years (and annual dividend payments since 1889!)
  • Sherwin-Williams (NYSE:SHW), hiking its dividend for 29 years in a row.
  • 3M (NYSE:MMM), hiking its dividend for 51 years in a row.

While you shouldn't give dividends short shrift, you shouldn't invest blindly in them, either. The Dividend Achievers may feature the cream of the crop in dividend land, but remember that 63 of them fell from grace in the past year. Watch out for companies with high payout ratios.

Also, don't forget that not all dividend increases are the same. However consistent its payout hikes, a company that raises its dividend by an average annual 3% isn't nearly as enticing as one that offers an average 12% increase. (Here are some examples of great hikers.)

If you're looking for dividend-paying candidates for your portfolio, a free, no-obligation trial of our Income Investor service will give you dozens of researched recommendations, many yielding 8% or more.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. Otter Tail is a Motley Fool Hidden Gems selection. 3M is a Motley Fool Inside Value pick. Sherwin-Williams is a Motley Fool Stock Advisor recommendation. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.