If you want income from your stock portfolio, there's no better place to look than top dividend-paying stocks. Fortunately, you don't have to sacrifice quality or safety to find stocks that have increased their dividend payouts substantially in recent years.

Why you need dividends
Early in your investing career, you may not care so much about whether your stocks pay dividends. That's because for the most part, you're going to take whatever money your investments generate and plow it back into your portfolio by adding more shares of stock. In that light, dividends can actually seem like a bad thing because they generate tax liability if you own them outside a tax-sheltered retirement account like an IRA.

Eventually, though, you're going to need your investments to start helping you pay your way with living expenses and other financial needs. Rather than focusing solely on growth as you did for decades, you suddenly need to think about how to draw income from your assets.

Under ordinary circumstances, you'd have plenty of good choices to pick from. For years, even relatively short-term Treasuries yielded 5% or more, as did similarly safe investments like Federal Deposit Insurance Corp.-covered bank CDs. You didn't have to take any risk whatsoever to generate decent returns in that environment.

But in the past 10 years, retirement investors have suffered through two long periods of rock-bottom interest rates. Although they arguably helped sustain the economy by encouraging borrowing and related economic activity, they put savers in an untenable bind: Either accept earning next to no income from your investments and essentially guarantee that you'd have to dip into the principal of your nest egg to cover expenses, or take more risk and hope that those riskier investments don't blow up in your face.

7 stocks that paved the way
Although it's impossible to eliminate all risks from your portfolio, you can take steps to manage your risk. In turning to stocks to produce income, the ideal candidates are those that not only give you a decent amount of income right now but will also treat you right well into the future. For dividend investors, that means balancing current yield with future payout growth. The former makes sure that you can cover your expenses in the here and now; the latter helps ensure that you'll be able to keep up with rising costs despite the impact of inflation.

To get a sense of what sorts of stocks we're talking about, I went back 10 years to find stocks that had tripled their payouts over the decade. Surprisingly, I found dozens of stocks in the S&P 500 that fit the bill. Here are seven stocks that particularly caught my eye:


Current Yield

Annual Dividend Growth Rate Since 2001

Average Annual Return Since 2001

United Technologies (NYSE: UTX) 2.3% 15.2% 9.8%
McDonald's (NYSE: MCD) 3.2% 26.5% 13.4%
Medtronic (NYSE: MDT) 2.2% 16.6% (0.4%)
Intel (Nasdaq: INTC) 3.7% 24.6% (3.3%)
Devon Energy (NYSE: DVN) 0.8% 20.4% 12.7%
Texas Instruments (NYSE: TXN) 1.5% 19.1% (0.2%)
Ross Stores (Nasdaq: ROST) 1.2% 24.6% 21.6%

Source: Capital IQ, a division of Standard & Poor's.

You can draw several conclusions from these stocks about dividend payers in general. As you can see, not all fast-growing dividend stocks necessarily have huge yields. If share prices rise faster or nearly as fast as dividend payouts, then the yield will stay relatively constant -- but you'll get the double benefit of seeing your quarterly dividend checks rise in value as well as seeing your stock price go up steadily over the years.

Second, just because a stock pays a healthy dividend doesn't mean it's guaranteed to see long-term gains. Intel and Texas Instruments, for instance, have had thriving businesses lately, but in the aftermath of the tech bust, their shares were so richly valued 10 years ago that achieving gains would have been difficult. Yet for dividend investors whose primary concern is making sure they get the income they need from their stocks, the loss of principal value is outweighed by their rising payouts.

Lastly, you may be quick to dismiss the lower-yielding stocks on this list. Yet it would be easier for those stocks to show up again on this list in 2021 than their higher-yielding peers -- if only because tripling a dividend from a lower level is a lot easier mathematically than tripling a big one.

Get what you need
If you need income from your portfolio, dividend stocks are the place to look. But you don't need to ramp up the risk in order to earn a decent payout from your stocks. With the right dividend-paying stocks, you can ensure that you'll get the money you need to live throughout your retirement.

To get some great ideas on where to look for dividend triplers for the next 10 years, take a look at the highly regarded free report from Motley Fool's expert analysts called "13 High-Yielding Stocks to Buy Today." You'll find several great stock prospects, including one named by our senior retail analyst as "the one dividend stock for the rest of your life." To get instant access to the names of these 13 high yielders, simply click here -- it's 100% free.

Fool contributor Dan Caplinger wasn't very fast as a little leaguer, but he still remembers hitting a few triples in his time. He doesn't own shares of the companies mentioned in this article. McDonald's is a Motley Fool Income Investor choice. Motley Fool Options has recommended a diagonal call position on Intel, which is a Motley Fool Inside Value pick. The Fool has bought calls on Intel and owns shares of Intel, Devon Energy, Medtronic, and Texas Instruments. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy triples your pleasure.