The Dow breached the psychologically important 10,000
level yesterday, marking a pivotal point in the market's
torrid assent since the financial market's crash one year
ago. Despite the stock market's climb, investors are
skeptical of the its ability to sustain this rally further in
light of the financial sector's ills and the economy's
underlying problems.
If any of these forces do rear their ugly heads, it's
important to have dependable income streams from
dividend-paying stocks to balance out your portfolio.
JPMorgan Chase 's (NYSE: JPM) earnings report
serves as an example. The bank,
which reported third-quarter earnings yesterday, was able
to turn an eye-popping profit thanks to fixed-income trading,
which balanced out losses from its consumer credit business.
The same idea applies to your portfolio. When one part turns,
the other part balances it out.
Aside from stable returns, dividends can signal a
company's financial health -- especially in this economy, in
which former steady payers such as
Bank of America (NYSE: BAC)
have slashed their dividends. But mature companies that
still have more cash than they need, even in this stormy
market, are some of the strongest businesses out there.
Investing in stocks such as
Williams Partners (NYSE: WPZ) and
National Grid (NYSE: NGG), which yield 10.1%
and 6.1%, respectively, can give you a steady return in a
volatile market. And when the recession clears, these strong
companies should generate even greater returns for investors
as their shares rise.
How do you find solid companies with strong dividend
yields? I've done some of the dirty work for you, with help
from
The Motley Fool's CAPS screener. To search for stocks
with hefty dividends, I screened for companies with:
ratings, the highest possible, from our 140,000-member
CAPS community.
Here's some of what popped up from
my screen:
Company
Market Cap (in billions)
Current Dividend Yield %
Alliance Holdings (Nasdaq: AHGP)
$1.3
8%
Amerigas Partners
$2.1
7.2%
Penn West Energy Trust (NYSE:
PWE)
$6.8
10.7%
National Grid
$23.2
6.1%
Royal Dutch Shell (NYSE: RDS-A) Continued... |