Source: Flickr user

Dividends are the foundation to which all great long-term portfolio are built. Receiving a payment equal to 2% or 3% per year might not seem like much, but reinvested into that same growing company over the long-term it can mean big bucks and could actually allow you to retire earlier and more comfortably than you originally anticipated.

In addition to putting money in your wallet, top dividend paying stocks are also attempting to demonstrate to investors with their payout that their business model is sustainable. Dividend paying stocks provide a great defensive haven for investors when volatility rises and/or the stock market hits some bumps in the road. Not to mention that a dividend can help buffer an investors' downside.

Of course, yield is far from everything when it comes to top dividend paying stocks. A high-yield dividend can actually give investor a false sense of hope and wind up being dangerous. For example, a dividend yield may be unsustainable, and a future dividend cut could wreak havoc on a stock's share price. Also, a dividend yield may be growing because a stock's share price is sinking rapidly. Therefore, investors need to be aware of the health of the underlying business behind the dividend before they blindly go chasing yields.

Today, we'll take a closer look at the healthcare industry's top dividend paying stocks and see whether these are the types of dividend stocks that could help, or hurt, investors over the long run.

PDL BioPharma (NASDAQ:PDLI): 7.5% yield
PDL BioPharma is far and away the top dividend paying stock in the healthcare sector with a yield in excess of 7%. The company manages a portfolio of royalties and patent assets that it's acquired throughout the years and uses its extremely low operational costs to keep its profits and margins bountiful. In theory, the more diverse PDL's licensed portfolio the safer its revenue stream should be.

However, this stock looks more like a trap than a true long-term hold. PDL's management team has not been shy about the idea that PDL may not be able to successfully replenish its patent and royalty revenue when key therapies such as Biogen Idec's Tysabri comes off patent. Though in 2013 PDL's CEO John McLaughlin noted the expectation that inventory buildups would lead to royalty payments from Tysabri into 2016, he offered no assurances that Tysabri's critical revenue would be replaced. If that's the case, it's possible PDL BioPharma could be sold off or wound down at a loss to existing shareholders. In short, this is not a dividend stock I would suggest chasing. 

GlaxoSmithKline (NYSE:GSK): 5.5% yield
If you want a top dividend paying stock worth chasing after, I'd suggest giving big pharma GlaxoSmithKline a closer look. Its yield has received a bit of a boost in recent months due to a 20% tumble in its share price, though I see nothing wrong with its business model. Instead, shareholders are adjusting for the loss of Advair/Seretide, its blockbuster inhaled COPD maintenance drug, in the next couple of years as generic drugs are introduced.

Source: GlaxoSmithKline via Flickr.

The good news here is that GlaxoSmithKline has quite a few replacement therapies lined up to take Advair/Seretide's place, including Food and Drug Administration-approved therapies Breo Ellipta and Breo Anoro, which were co-developed with Theravance. Both drugs have peak annual sales potential of more than $1 billion, with the duo working on a handful of additional long-lasting COPD maintenance therapies. This is an income stock I'd personally feel confident holding for the long run

Source: Flickr user William Warby.

PetMed Express (NASDAQ:PETS): 5.1% yield
PetMed Express is an online retailer pet owners can use to order food, vitamins, and pharmaceutical products without having to load their pet into their car and head to their local vet's office. The idea is that with lower overhead costs and added convenience the online pet product model should be wildly successful.

The reality, however, is that PetMed Express' business has been somewhat sluggish since the recession. I suspect the reason behind it is that consumers still prefer the expertise of their vet's office or simply enjoy in-person advice for their pets, which is a tough objection for PetMed Express to overcome. While I expect the company to remain profitable and pay out a handsome yield, I also don't believe this dividend has much chance of growing any time soon given its already high dividend payout ratio.

Meridian Bioscience (NASDAQ:VIVO): 4.8% yield
Meridian Bioscience is an interesting case, because on the surface it probably looks like a mess. The company, which makes a varying array of point-of-care diagnostic tests for hospitals, labs, and outpatient clinics, has missed Wall Street's estimates far more often than it's hit them in recent years, and it's struggled under the weight of the Affordable Care Act rollout which has stymied healthcare spending and caused consumers to be more gun-shy about elective procedures and tests. Keeping with that theme, Meridian whiffed on its fourth-quarter estimates just this past week. 

Source: Meridian Bioscience.

However, just as the ACA has been a hindrance for now, it should be a major growth driver for decades to come as an aging and now mostly insured population seeks personalized preventative care measures from their physician. Furthermore, despite being a small-cap stock, Meridian has successfully paid a dividend for 24 years, demonstrating the stability of its business model. It's certainly worth a deeper look if you're an income investor with a modest-to-high level of risk tolerance.

Sanofi (NASDAQ:SNY): 4.2% yield
If we had an award to hand out for the oddest stock of the bunch it'd probably go to Sanofi, which is one of the largest pharmaceutical companies in the world.

Former CEO Chris Viehbacher. Source: Sanofi.

The only reason Sanofi even appears on the list is because its share price fell nearly 20% over the past couple of weeks following the surprising ouster of now-former CEO Chris Viehbacher. While no concrete reason has been laid out for Sanofi's board ousting Viehbacher despite Sanofi delivering sales and profit growth in its latest quarterly results, the consensus opinion appears to be a lack of communication between him and the board. Either way, the move clearly caught investors by surprise.

Like Glaxo, and pretty much every other big pharma at the moment, Sanofi is dealing with the loss of exclusivity of previously key drugs. In Sanofi's case it's relying heavily on emerging market growth and its generic platform to pick up the slack. While I do believe that'll be enough to buoy Sanofi's dividend, I don't see significant upside in its payout over the coming years. If shares continue their decline, though, it could definitely be worth your while to dig deeper into Sanofi.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.