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

Rockefeller's words resonate now, as investors professional and amateur stare at the market, wondering how to generate lasting returns. Since price appreciation alone hasn't been a reliable option for producing returns in this volatile market 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 -- especially in this market, as former stable payers such as Bank of America (NYSE:BAC) have cut their dividends because of the current financial squeeze. These days, only about one-third of publicly traded companies in the U.S. continue to pay a steady dividend. Mature companies that even today have more cash than they need are some of the strongest businesses out there.

In this macro environment, investing in stocks such as Penn West Energy Trust (NYSE:PWE) and BP (NYSE:BP), which yield 12.6% and 7% respectively, can give you a solid return in a market where price appreciation may not be reliable. These companies are also strong, so when the financial tempest clears, investors should see returns through price increases.

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 130,000-member CAPS community.

Here's what popped up from my screen:

Company

Market Cap
(in millions)

Current Dividend
Yield %

Alliance Resource Partners (NASDAQ:ARLP)

$1,307

8.2%

BP

$150,861

7%

Brookfield Infrastructure Partners

$313

7.8%

National Health Investors (NYSE:NHI)

$728

8.7%

Pepco (NYSE:POM)

$2,818

8.7%

Penn West

$5,238

12.6%

Data from Capital IQ, and Motley Fool CAPS as of May 27.

However, just because a company doles out dividends now doesn't necessarily mean it always will. Even though the credit markets have started to thaw, companies continue to be more cash-constrained. Take Allied Irish Bansk (NYSE:AIB), for example, which boasts a trailing dividend yield of a whopping 52%. On the surface, it may seem that this company would be rolling in cash, but dig a little deeper and you'll find that the company axed its final dividend last year and announced it may have to cut future payouts to preserve capital.

One of the reasons the yield is so high is because Allied Irish's price has plummeted some 95% from its high of $63.88 in early 2007. (Dividend yield is calculated as annual dividend/price per share.)

Many banks worldwide are reeling from the global financial crisis, but Allied Irish is suffering in particular due to its exposure to Ireland's rocky real-estate market. Ireland's banking system has crashed, requiring the Irish government to guarantee the debt obligations of the nation's banks -- including Allied. Most recently, the bank discussed plans to raise 1.5 billion euros ($1.9 billion) of capital, on top of the Irish government's 3.5-billion-euro capital injection. Moody's is also considering cutting credit grades on government-backed debt issued by Irish banks, including that of Allied. If Allied Irish is in constant need of cash, chances are that its future dividends are very vulnerable.

Dividends are one way to search for quality companies, but it's important to dig deeper and see if any individual investment is right for your portfolio. You should especially take notice if the yield goes much higher than 8% for a common stock (REITs, which are required to pay out a large portion of their earnings, are an exception). 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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Fool contributor Jennifer Schonberger does not own shares of any of the companies mentioned in this article. Allied Irish Banks is a Motley Fool Global Gains pick, and the Fool owns shares of it. Brookfield Infrastructure Partners is a Motley Fool Hidden Gems and Inside Value recommendation. Alliance Resource Partners is an Income Investor selection. The Motley Fool has a disclosure policy.