The forecast for today: stormy with a chance of profits. Unfortunately, market plunges and sell-offs are a reality of investing. Luckily, gray days can work in your favor when good companies start selling for bargain prices. Let's look at some financially healthy stocks able to weather the market's storms like Friday's 300-point plunge in the Dow Jones Industrial Average (INDEX: ^DJI). Here are some dividend-paying stocks with high yields and strong balance sheets that deserve a spot in your portfolio.
Dividends that come rain or shine
Love them or hate them, tobacco companies like Altria Group
In what may come as a surprise, Altria has stakes in the wine business as well, through its subsidiary Ste. Michelle Wine Estates. It also has an interest in SABMiller, the world's second-largest brewer. More important for investors, Altria has paid hefty dividends for 43 years running. Its dividend yield of 6.2% is notably higher than the 10-year Treasury, which currently yields about 2%.
It's also important to consider the company's payout ratio -- the dividend payment as a percentage of earnings. However, earnings alone don't always tell the whole story of whether or not a company will continue to pay its dividend. The free cash flow payout ratio compensates by measuring the percent of free cash flow set aside for paying the dividend.
With a free cash flow payout ratio of 79%, Altria shouldn't be cutting dividends anytime soon. Better yet, Altria was the single best investment to own in the 50 years ended in 2003. Between its strategic subsidiaries in multiple industries and consistent shareholder returns, Altria is full of profits.
Rain gear for investors
Although I'm not a fan of AT&T's
Coming in behind AT&T is Vodafone Group
Another dividend champion comes in the form of utility stock Duke Energy
Here's the plan
Next time a market storm sets in, jump into stocks with high-yielding dividends, plenty of free cash flow, and relatively low payout ratios. Or stay in, sit down with one of our free reports, and listen to the rain. Hundreds of thousands of people have requested access to the special free report "5 Stocks The Motley Fool Owns and You Should Too," and now you can access it today at no cost. Get instant access to these moneymaking stocks -- it's free.
Fool contributor Tamara Rutter owns shares of Duke Energy. Follow her on Twitter for the scoop on all things Foolish. The Motley Fool owns shares of Altria Group. Motley Fool newsletter services have recommended buying shares of AT&T and Vodafone Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.