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Quiz time, sports fans: What did the New York Yankees of the 1950s and the Chicago Bulls and Dallas Cowboys of the 1990s have in common? (And exactly how can this help you with your portfolio?)
It wasn't just that they had some of the best players of the time -- Yogi Berra, Michael Jordan and Emmitt Smith, respectively -- although that helped. And it wasn't just that they were able to bring home world championships on a regular basis. Their organizations and performances were consistently excellent.
Consistent excellence is rare anywhere, but imagine seeing it in your portfolio. Impossible? No way! Because that's what carefully chosen dividend-paying stocks can offer.
- Contest: Beat the market, win $2,500
Finding these long-haul outperformers can help you build your fortune, as studies from investing gurus such as Jeremy Siegel have shown repeatedly.
Shares of asset-management firm AllianceBernstein Holding (AB, news, msgs), for example, have returned roughly 150% since August 2004 and reward investors with a 6% dividend yield. Then there's France Telecom (FTE, news, msgs), a stock that has returned about 60% since January 2006 and now has a 4.5% yield.
Our CAPS investor-intelligence database is a place where savvy investors go to help one another identify stocks that can create consistent and substantial growth. Whether you're a Buffett-like value investor or a chart-watching technical trader, you are welcome to strut your stuff at CAPS. And, just as in professional sports, the cream inevitably rises to (and stays at) the top.
So what are the best dividend-paying stocks around, according to CAPS?
| Company | Industry | Yield | CAPS rating (out of five) |
|---|---|---|---|
Telecommunications | 3.8% | **** | |
Oil and gas | 0.6% | ***** | |
Shipping | 12.7% | **** | |
Corporate and retail banking | 3.3% | ***** | |
Mining | 5.5% | ***** |
I encourage you to use CAPS to learn more about why investors are so bullish on these companies and perhaps to add your own thoughts to the system. I'll get you started with some thoughts about one company here that may be worth checking out: AT&T (T, news, msgs).
Of course, Cingular isn't the only thing that's now AT&T. Since being broken up in 1984 by the U.S. Department of Justice over antitrust concerns, AT&T has managed to build itself back through mergers and acquisitions -- and even being acquired itself -- into a massive national communications provider. Though obviously a joke, comedian Stephen Colbert's examination of AT&T's history gives a pretty good picture of its round-trip journey.
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CAPS players seem to like the new AT&T, and 2,371 bulls have helped the stock secure a four-star rating.
CAPS All-Star ''InvestorDeb" recently picked AT&T as an outperformer, noting the company's $15 billion stock buyback program and its dividend boost. She added that AT&T has "good growth, visible earnings and prudent management that is aligned with shareholders."
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You can check out who else is bullish on AT&T, and chime in with your own thoughts, by heading over to CAPS. While you're there, you may also want to check out some of the other top-rated dividend payers mentioned in this column.
Allow me to suggest that dividend stocks will help you turn your portfolio into the dependable New York Yankees rather than the flash-in-the-pan Florida Marlins.
This article was reported and written by Matt Koppenheffer for The Motley Fool. At the time of publication, he owned none of the stocks mentioned.
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