With the market near the highest levels of the year, now is the time to make sure you are ready for all possibilities. The question you should be asking yourself is, "Are my stocks lifeboats, ready to save me, or filled with holes from the last storm sending me to the bottom?"

Hopefully you have a lifeboat
To find lifeboats, I ran a screen on CAPS, the 145,000-strong Foolish investor intelligence database, looking for financially sound companies that pay a hefty dividend.

The criteria I used for the search were simple:

  • I wanted to consider only stocks that our CAPS community classifies as being top-quality. At least 500 active players have picked these businesses, and they all carry four- or five-star rankings, the highest possible out of five.
  • Next, the last storm, the credit crunch, sunk stocks left and right, I want stocks with very little debt. The easiest way to find these 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
(out of 5)

Fools Rating Outperform

Debt-to-Equity Ratio

Dividend Yield (%)



3,054 of 3,192





608 of 655



Northstar Realty


565 of 599



Total SA


746 of 765



Penn West Energy Trust


1,338 of 1,370





795 of 810



Terra Nitrogen


1,128 of 1,170



Motley Fool CAPS as of Nov. 30.

While these stocks aren't recommendations, they are a great starting point for research. Just make sure you do your own due diligence. With that said, here's what a few of the members of our community are saying about these companies.

Fool All-Star mrindependent had this to say about Turkcell:

Turkcell is an undervalued monopoly telecom service provider in Turkey. The company is profitable and enjoys a pristine balance sheet with $1.50 per share in net cash. The current dividend payout rate is 5% and the annual dividend looks safe considering (1) cash per share is equal to two years of dividends and (2) the current payout ratio is only 42% of earnings.

CAPS member btthus likes BP's low P/E ratio while stayfrosty5 believes: "BP will continue to dominate over the coming years. Oil prices will go up when Obama and his clones pass the carbon initiatives."

CAPS All-Star PsychoDr likes Vodafone's stake in Verizon wireless as well as its leadership around the world:

Telecom is a rapidly evolving tech domain that continues to see infrastructure development, even during the world recession. [Vodafone] is an international leader, with nice foothold in developing markets. While [AT&T (NYSE:T)] has [Apple (NYSE:AAPL)] iphone in US, [Vodafone] has grabbed this handset in Europe. Some say price wars will drive earnings down after iphone exclusivity ends. I think people will stay with the carrier they prefer if they can also get the phone they want. With a 45% stake in Verizon wireless, you get major exposure to the US market as well. Huge dividend is sustainable because of the gynormous free cash flow generated, and this is without a dividend from [Verizon] wireless.

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?

Dan Dzombak is listening to The Hood Internet. He does not have financial positions in any of the stocks in this article. Apple is a Motley Fool Stock Advisor pick. Turkcell and Total SA are Motley Fool Income Investor recommendations. Turkcell is a Motley Fool Global Gains recommendation. Try any of our Foolish newsletters today, free for 30 days.