Like the Incredible Hulk, dividends are a force to be reckoned with.

If you ask me, there is no better way to quickly determine the overall attractiveness of a stock than by checking out its dividend. Dividends can give you a sense of whether a company is really making money, whether its stock is reasonably valued, and how management views shareholders. All in all, it's a pretty mighty number.

And while most investors are very familiar with dividend royalty like ExxonMobil (NYSE:XOM) and IBM (NYSE:IBM), there are also plenty of good dividend-paying companies that are small enough to fly under Wall Street's radar. And many of these undercover dividend payers offer higher dividend payouts, better growth, or both.

To uncover some of these small dividend dynamos, I turned to the Motley Fool CAPS community, looking specifically for companies with a market cap below $5 billion and a dividend yield above 2.5%.


Market Cap

Dividend Yield

CAPS Rating
(out of 5)

Terra Nitrogen (NYSE:TNH)

$2 billion



Safety Insurance Group (NASDAQ:SAFT)

$539 million



Brookfield Infrastructure Partners (NYSE:BIP)

$392 million



Greif Inc.

$2.6 billion



Realty Income (NYSE:O)

$2.9 billion



Source: CAPS.

While the stocks above are all small and dividend-paying, the star ratings make it apparent that the CAPS community doesn't think they're all worth your investment dollars. They could all be worth researching further, though, and to get you started, let's take a closer look at Motley Fool Hidden Gems recommendation Brookfield Infrastructure Partners.

The business
Canadian asset manager Brookfield Asset Management (NYSE:BAM) brought Brookfield Infrastructure Partners into existence to hold its infrastructure assets. What exactly do we mean by infrastructure assets? BIP describes its investment focus like this: "We focus on high quality, long-life assets that generate stable cash flows, require relatively minimal maintenance capital expenditures and, by virtue of barriers to entry or other characteristics, tend to appreciate in value over time."

More specifically, the company owns electricity transmission lines in Chile and Canada; timberlands in Canada and the United States; and various other "social infrastructure" assets such as hospitals and showgrounds. And that's not to mention the assets that the company acquired in the recapitalization of Babcock & Brown Infrastructure (BBI).

If those assets don't get the safety-seeking, income-focused investor's mouth watering, then I don't know what would.

The dividend
Unfortunately, since BIP was spun off from BAM in 2007, we don't have a whole heck of a lot of history on BIP's dividend. Making matters worse, the huge investment in BBI happened after BIP's most recent financial report, so we'll need to wait for the next report (scheduled for Feb. 8) to get a good look at that.

What we can say about the dividend, though, is that it's backed by solid, long-lived, cash-generating assets that are unlikely to stop producing anytime soon. Sure, the economy has taken a big bite out of some aspects of the business -- I'm looking at you, timber -- but others, such as electricity transmission, have proven more stable.

CAPS members sound off
On CAPS, Brookfield Infrastructure sports a perfect five-star rating thanks to 553 outperform ratings against just five underperforms.

Not surprisingly, the principal attractions are the stability of the company's assets and the juicy dividend. CAPS All-Star alars79 recently became one of the BIP fans and had this to say:

Great divident, great cash position. Operations are recession resistant (utilities) and poised to take advantage of economic growth (infrastructure)

Your turn
Think these dividend payers have what it takes to be top-notch investments? Head over to CAPS and share your thoughts on the prospects for Brookfield Infrastructure or any of the other companies listed above.

Is that an iceberg headed toward your portfolio? Let Foolish Capt. Nick Kapur help you steer clear of its value-destroying bulk.