Ruth, Jordan, Montana. You don't have to be a sports fan to recognize those names, with very good reason. 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 the kind of day-in, day-out all-star 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 repeatedly shown. 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.

France Telecom, for example, has beaten the S&P 500 by 42 points since January 2006, and it is currently rewarding investors with a 8.1% yield. Or consider H.J. Heinz, which has topped the S&P by 22 points since August 2004, atop a current 4.8% yield. 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 130,000-plus members of our CAPS community:


Trailing Yield

CAPS Rating (max 5)

Johnson & Johnson (NYSE:JNJ)



Caterpillar (NYSE:CAT)






Nokia (NYSE:NOK)



Deere (NYSE:DE)



Source: Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and CAPS as of March 26. 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 with CAPS' handy 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 Finland's Nokia.

Does my dividend have a glass jaw?
The last thing we want in a dividend-paying company is the risk that a drastic downturn will force dividend cuts. This usually ends up being a double whammy. Even as you lose your dividend payout, many of the dividend-loving investors who own the stock run for the hills, causing the stock price to fall.

With that in mind, there are three places that I immediately tune into when kicking the tires of a dividend payer -- dividend history, balance sheet strength, and cash flow. The longer the history of dividend payouts, the better. Nokia has paid its shareholders for pretty much its whole history as a public company, giving it more than a decade of payouts.

Turning to the financial statements, Nokia has typically produced enough free cash flow (FCF) to pay its dividend and then some. In fact, for years, the company spent billions buying back stock, even as it increased its dividend payout. Tougher times, however, meant that free cash flow (operating cash less capital expenditures) in 2008 just barely covered the dividend. A lowered dividend for 2009 will give Nokia some breathing room, and it also has nearly $11 billion of cash and short-term investments to fall back on. To see dividends start moving in the right direction again, though, we're probably going to need to see a turnaround -- or at least a stabilization -- in Nokia's business sooner rather than later.

What the bulls say
CAPS All-Star and fellow Fool Tim Hanson (TMFMmbop) is one of the most recent to join the nearly 2,400 Nokia bulls on CAPS. He said:

Somewhat of a commodity business so I have some reservations here, but strong balance sheet, good brand, dominance in emerging markets, and FCF generating capabilities render their inability to develop smart phones somewhat moot.

At first blush, I was inclined to agree with those who point to Nokia's weakness in smartphones as a fatal flaw. But I may be basing my opinion solely on the U.S. market. While Apple (NASDAQ:AAPL), Research In Motion (NASDAQ:RIMM), and heck, even Google (NASDAQ:GOOG) knock around Nokia in the U.S., the Finnish company dominates mobile internet usage on the global playing field. This isn't to say that we should ignore the pressures of its very innovative competitors, but it would seem that Nokia is most competitive where it counts the most -- developing markets.

So while Nokia may face some near-term pressures as the economy pinches sales, the longer-term opportunity of serving emerging markets and churning out piles of cash makes the company look like a pretty attractive pick.

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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