There's not an investor out there who doesn't enjoy receiving a dividend payment. But are you actually optimizing your research and considering all of your available dividend investment options? If you had asked me an hour ago, I'd have assuredly said "yes." But after using and abusing the Motley Fool CAPS Stock Screener in search of little-known, yet high-yielding dividend payers, a few potential gems leapt out from the group. Remember, these are not buy recommendations, but they are the basis for further research, given these solid payouts.

The basis for my screen was:

  • Dividend yield >/= 3%
  • Market cap > $200 million
  • Average daily volume < 30,000
  • Price > $5.00

I felt this screen would allow me to weed out volatile micro-caps, allowing us to discover some truly special dividend payers that have thus far gone unnoticed. Here are the seven companies I chose:



Dividend Yield

Northern European Oil Royalty (NYSE: NRT) Energy royalty trust 8.6%
Ampco-Pittsburgh (NYSE: AP) Diversified machinery 3%
Arrow Financial (Nasdaq: AROW) Regional bank 4.1%
Kansas City Life Insurance (Nasdaq: KCLI) Life insurance 3.6%
Sabine Royalty Trust (NYSE: SBR) Energy royalty trust 6.3%
Electro Rent (Nasdaq: ELRC) Rental & leasing 4.1%
Westpac Banking (NYSE: WBK) Foreign bank 6.9%

Source: Motley Fool CAPS.

Northern European Oil Royalty owns the royalty rights to certain leases of land in Germany. It turns these rights into instant cash by allowing ExxonMobil and Royal Dutch Shell to drill for oil and natural gas on its land and claiming royalties on what's sold. The company's dividend is extremely erratic, but at 8.6%, it's hard to miss. As goes the price of oil, so goes this company's dividend.

You may recognize Ampco-Pittsburgh as a Rising Star buy from fellow Fool Alex Pape back in February. The company makes custom-order parts for steel mills, and as Alex pointed out, it has a near-monopoly in its line of parts production. The handsome 3% yield is icing on the cake.

Arrow Financial is a consumer and commercial lender in northeastern New York that stared the financial crisis square in the face and didn't blink. Its conservative balance sheet has yielded an impressive 16-year streak of equal or greater dividend distributions. This 4.1% payout also appears as rock-solid as they come.

Kansas City Life Insurance is a company I featured a month ago as extraordinarily inexpensive. The company currently trades at roughly half of its book value and has a pile of unrealized gains in its investment portfolio. Its lack of dividend growth is a knock against it, but a 3.6% yield isn't something to ignore, either.

Sabine Royalty Trust makes money much like Northern European Oil: It has royalty rights to land in the Gulf Coast region and midwestern United States. Also like Northern European Oil, its profits and dividends will move with the oil market. With strong prices predicted for the remainder of 2011, it's no surprise that Sabine Royalty is yielding 6.3%.

Electro Rent rents, leases and sells electronic equipment, primarily to corporations in the aerospace, semiconductor, and telecom sectors. Its stable business model has afforded the company a debt-free balance sheet and allowed shareholders to rake in a rock-solid dividend over the past four years.

Westpac Banking provides lending and finances services to corporate clients in Australia and New Zealand. Although it only gives its shareholders a payout twice a year, it's well worth the wait, with an annual dividend currently clocking in at 6.9%.

If you seek it, payments will come
Just remember that if you aren't willing to do the homework, you may never come across potential dividend goldmines like these.

What's your favorite name on this list? Perhaps you have your own favorite dividend play I've left out? Share your ideas in the comments section below and consider adding Northern European Oil Trust, Ampco-Pittsburgh, Arrow Financial, Kansas City Life Insurance, Sabine Royalty Trust, Electro Rent, and Westpac Banking to your Watchlist.