Everyone knows the market has been sinking faster than the Titanic. To survive this downturn the question you should be asking yourself is, "Are my stocks lifeboats, ready to save me, or wreckage dragging me to the bottom?

Hopefully you grabbed a lifeboat
To find lifeboats, I ran a screen on CAPS, the 110,000-plus investor strong Fool intelligence database, looking for financially sound companies that pay a hefty dividend.

The criteria I used for the search was simple:

  • I wanted to consider only stocks that our CAPS community classifies as being top quality. At least 1,000 active players have picked these businesses, and they all carry four- or five-star rankings, the highest possible out of five.
  • Next, with the credit crunch sinking stocks left and right, I wanted stocks with very little debt. One easy way to find this is to screen for a debt to equity ratio below 0.5.
  • I wanted to consider only businesses with some scale, meaning they have a market cap of at least $1 billion.
  • Finally, in these hard times you could always use some more change in your pocket. As such, I wanted stocks that actively return money to shareholders. I screened for companies with a dividend yield greater than 5%.

I found these lifeboats:


CAPS Rating

Fools Rating Outperform

Long Term Debt to Equity Ratio

Dividend Yield (%)

Southern Copper (NYSE:PCU)


3519 of 3646



Terra Nitrogen Company (NYSE:TNH)


952 of 1004



The Dow Chemical Company (NYSE:DOW)


1091 of 1165



Duke Energy (NYSE:DUK)


1128 of 1188



Altria Group (NYSE:MO)


6393 of 6632



Diana Shipping (NYSE:DSX)


1707 of 1756





1817 of 1936



Motley Fool CAPS as of July 30th.

While these stocks aren't recommendations, they are a great starting point for research. Just make sure you do your own due diligence. To get you started, here's a summary of one stock that caught my attention.

With that said, here's what a few of the members of our community are saying about these companies.

Fool All-star marc64 had this to say about Terra Nitrogen:

I really like the industry they are in, I think their profits will continue to come in great, hopefully consistently enough that the share price will reflect some confidence. Terra is in a position to formulate nitrogen fertilizers precisely for the need, and the demand is there in a growing way for what they make.

CAPS member holyemo thinks regulatory change will help Duke Energy grow profits in the future with this pitch from last year:

Duke Energy is poised to profit. As frustrating as it is to many, the company is likely to make considerable progress on its nuclear plant facility, especially as carbon limits come into being in a few years or so. Parts of these regulatory changes may result in more profit for less investment.

CAPS All-star Gedunken told us earlier this year about Diana Shipping's long-term contracts and strong dividend:

Almost all of Diana Shipping's fleet are on time charters which guarantees a certain income from each ship. These contracts generally last for years and Diana has been very good about rolling over ships from one contract to another and even making arrangements for contracts for new ships while they are still being built. I'm happy to take my 8% dividend from a company with good financials and steady, well defined earnings.

Three for free
That's what investors are saying about these three stocks, but there are thousands of stocks in the markets and we haven't yet heard from you. Why not head over to the completely free Motley Fool CAPS service, and share your opinions on these or any other stocks staying afloat?

Related Foolishness

Dan Dzombak knows the greatest secret of all, but unfortunately that does not include the location of Carmen Sandiego. He does not have financial positions in any of the stocks in this article. Duke Energy and Dow Chemical are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Fool disclosure policy swears it once saw Carmen Sandiego jogging on the National Mall.