We've noted before that dividend investing is a tried-and-true strategy for building long-term wealth. In fact, a study by Ned Davis Research found that dividend-paying stocks outperformed their stingier counterparts 10% vs. 4% annually from 1972 to 2006.
In other words, you can generate sizable investment returns, even during times of market turmoil, if you can identify dividend stocks that will set you for life.
In order to find worthy research candidates, we used the Fool's CAPS screening tool to look for solid companies that pay a strong dividend.
Below are 10 companies rated to outperform the market by more than 100 All-Stars -- those CAPS members whose track records rank them in the top 20th percentile of our 145,000-member investing community.
These stocks also have:
- Market caps greater than $1 billion.
- Dividend yields greater than 1%.
- Five-star ratings, the highest possible, from our CAPS community.
|
Company |
Dividend Yield |
All-Stars Rating Outperform |
|---|---|---|
|
Valero Energy (NYSE:VLO) |
3.6% |
1,142 of 1,172 |
|
Penn West Energy Trust (NYSE:PWE) |
10.2% |
381 of 386 |
|
Bristol-Myers Squibb (NYSE:BMY) |
4.8% |
409 of 423 |
|
Huntsman Corp. (NYSE:HUN) |
3.8% |
232 of 237 |
|
NYSE Euronext (NYSE:NYX) |
4.7% |
587 of 601 |
|
Johnson & Johnson (NYSE:JNJ) |
3.0% |
3,020 of 3,078 |
|
BP (NYSE:BP) |
6.0% |
900 of 924 |
|
Genuine Parts |
4.2% |
106 of 107 |
|
France Telecom |
6.7% |
168 of 174 |
|
Emerson Electric |
3.2% |
321 of 328 |
Data from Motley Fool CAPS and Yahoo! Finance.
Remember, this screen is only a starting point in the research process. When selecting dividend payers, Fools know it's important to make sure a company has sufficient free cash flow to sustain and grow its dividends for years to come.
Come and join us on Motley Fool CAPS to dig into these companies further. Let our 145,000-strong (and counting) CAPS community help you make better stock selections. It's entirely free.
