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.

Wouldn't it be great -- especially in times of economic turmoil -- to have a performer like that in your portfolio? Well, high-quality dividend payers can be just the 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.

Health Care REIT (NYSE:HCN), for example, has beaten the S&P 500 by 46 points since September 2003, and it currently is rewarding investors with a 7.6% yield. Or consider Johnson & Johnson (NYSE:JNJ), which has topped the S&P by 24 points since April 2006, atop a current 3.3% yield. While these stocks happen to be Motley Fool 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 135,000-plus members of our CAPS community:



CAPS Rating (5 max)

Caterpillar (NYSE:CAT)






Nokia (NYSE:NOK)



Dow Chemical (NYSE:DOW)



Exelon (NYSE:EXC)



Sources: Capital IQ, a division of Standard & Poor's, and CAPS as of June 4.
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 Caterpillar.

Does my dividend have a glass jaw?
The last thing we want in a dividend-paying company is the risk that the company will fall off a cliff and have to pull back its dividend. This usually ends up being a double whammy, because not only do you lose your dividend payout, but many of the dividend-loving investors who own the stock will 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, financial statements, and business stability.

There's good and bad to be found in Caterpillar's dividend history over the last 20 years. On the bright side, the company has boosted its payout in 14 of the last 15 years. The only blemish I see is that it cut the dividend almost in half from 1990 to 1992 as the economy did poorly.

At first glance, the debt on Cat's balance sheet looks pretty scary. However, the company has the interest payments on its corporate debt well covered, and its finance division -- which lays claim to most of the debt -- was still profitable in the first quarter. Cat's cash flow production has bounced around a bit, but over the past few years it has produced enough cash to cover its dividend.

Caterpillar isn't exactly a stable, steady business. That doesn't mean it's a bad business, but the company simply isn't going to sell nearly as much of its heavy equipment during recessions as it will during boom times. So far it has continued to produce a good amount of cash flow even though GAAP profit has suffered. If the recession pushes on for much longer, we could see this change, and that could force some tough decisions about the dividend.

What the bulls say
Caterpillar isn't quite at five-star status on CAPS, but with 4,657 outperform ratings against 257 underperforms, it's certainly a stock that many CAPS members think will perform well.

Interestingly, a couple of the recent Cat bears have called out the potential for a dividend cut over the next couple of years as a tougher business climate hurts profit. CAPS member and Cat fan CooolHandLuke sees things a little differently though:

[Caterpillar] is going to benefit directly from big government spending. Many of the "shovel ready projects" are major projection and road projects. This will be a direct benefit to [Caterpillar]. It pays a fair dividend. This stock company has bright days ahead.

As for me, I'm not convinced that Cat's dividend is sustainable or that its price today is a bargain. I like its operating business a lot, though, so I'm going to sit on the fence for now, hoping that the pieces fall in place to make the stock more attractive. And if that does happen, you can be sure that there will be a green thumb for Caterpillar in my CAPS portfolio.

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?

More CAPS Foolishness:

3M and Nokia are Motley Fool Inside Value selections. Health Care REIT and Johnson & Johnson are Income Investor picks. Try any of our Foolish newsletters today, free for 30 days

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out the stocks he's keeping an eye on by visiting his CAPS portfolio or connect with him on Twitter @KoppTheFool. The Fool’s disclosure policy pays its dividends in reliability.