Got dividends? If not, this might be a really good time to get some.

A stock with a good, solid dividend is a beautiful thing. It's an especially beautiful thing during times of market turmoil. Why? Because when you own stocks with sustainable dividends, you know you'll be making money whether the market is up or down at any given moment.

In fact, assuming you're reinvesting the dividends -- using them to automatically buy more of the stock, rather than receiving them in cash -- market dips mean you get even more shares for your money. Over time, the power of reinvested dividends can match -- or even outperform -- returns from growth stocks, with way more stability and predictability. And unlike growth stocks, the best dividend stocks can keep generating outsized returns for decades.

A good stock, not just a good dividend
A high, sustainable dividend is a great thing. But finding one coupled to a value price is even better, especially when the market is being unpredictable. While stock prices can seemingly go anywhere over the short term, a good stock bought at a value price -- a price lower than its intrinsic value -- has less downside risk over the long term. That usually translates to more stability during times of market turmoil.

Mmore to the point, value stocks are by definition good buys -- stocks where you can expect some solid appreciation over time. Now, factor in a high, sustainable dividend -- at a great price that leaves room for appreciation? That's a great thing.

How to find the great ones
I like the stock screener on Motley Fool CAPS for a lot of reasons; for one thing, the star ratings serve as a quick-and-dirty proxy for the quality of a company as an investment. For these purposes, if you set the CAPS screener to filter out companies that have fewer than 50 or so ratings, and to show only four- or five-star-rated stocks with dividend yields of 4% or more and P/E ratios of 15 or less, you'll have a list composed entirely of prime dividend-stock value candidates. They're not sure things by any means, especially since P/E isn't the greatest measure of value nowadays, but most of the scary ones will get left behind.

I also like to weed out companies with other problem signs. For instance, because high debt can be a sign of trouble looming, I look for a long-term debt-to-equity ratio of 0.8 or less. I also like companies whose return on equity -- a quick indicator of management's effectiveness -- is 15% or higher.

Do all that, and you'll get a list that looks a lot like this:


CAPS Rating
(out of 5)

P/E Ratio

LT Debt-to-Equity Ratio

Return on Equity

Dividend Yield

Linn Energy (Nasdaq: LINE)






Olin (NYSE: OLN)






Partner Communications (Nasdaq: PTNR)






Sasol (NYSE: SSL)






Turkcell (NYSE: TKC)












Source: Motley Fool CAPS. LT = long-term.

If you do a bunch of these kinds of screens, you will find that certain types of companies tend to show up more often than others. Big pharmaceutical firms, for instance, often have fairly stable cash flows and fat dividends, which make them intriguing candidates for this sort of purchase.

I listed AstraZeneca above -- a 7.9% dividend yield is hard to resist -- but Eli Lilly (NYSE: LLY) and Merck (NYSE: MRK) also showed up in the same screen. They're also four-star-rated stocks with low P/Es, good dividends, and other appealing features. Any of them would be a good choice for further research.

Of course, the ratings are the consensus opinion of an informed community, but they aren't by themselves reason enough to buy. A careful look at the underlying business and the company's industry are musts before making the trade. You want to make sure the stock's not "on sale" for a bad reason! But a screen like this gives you a huge head start on your due diligence.

If you'd like to backstop your own research and check out some great dividend generators to buy today, help yourself to a free trial of our Motley Fool Income Investor service. Three of the stocks I mentioned are on its recommendation list -- and you can see all the others free for 30 days with a no-obligation trial.

John isn't the only dividend-loving Fool. Check out Selena Maranjian's big fat dividends.

Fool contributor John Rosevear has no position in the companies mentioned. Sasol and Turkcell are Motley Fool Global Gains recommendations. Partner Communications, Sasol, and Turkcell are Motley Fool Income Investor picks. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.