In a depressed and dangerous economy, it is important to secure guaranteed returns on your investments. Dividend paying stocks do exactly this; even if the stock falls in value, it will regularly return to its holder a certain portion of the investment.

A dividend is a distribution of a fraction of the profits a company makes to its shareholders. The board of directors of a company decides what percentage of the profit will be returned to investors, so that a certain amount may be allocated to be reinvested directly into expansion and growth. Companies use dividends to give regular returns to shareholders and thusly make their stocks more attractive to investors.

In this sense, the highest dividend paying stocks have either the greatest profit margins, or the largest commitment to gathering new investors. High dividend paying stocks are often the most stable stocks on the market, because their distributions guarantee that their stock will be in demand no matter the climate of the economy.

A dividend paying stock generally allocates a fixed amount to be paid per share. The dollar amount received by the investor for each stock he owns in the company is known as the “dividend per share.” It may also be quoted in terms of the “dividend yield,” which is quoted in terms of the stock’s market price at the time of dividend payment. Consequently, high yield dividend paying stocks can be made even more attractive as their value increases. This consistent return process guarantees a certain amount stability.

It may be profitable, therefore, for any one investor’s portfolio to simply be a list of dividend paying stocks. In may be difficult in many senses to discern the top dividend paying stocks from simply good dividend paying stocks. These securities are defined by their stability, which is often more important than their average annual yield. Because the stocks pay interest on your investment, they should be held for longer periods of time. In many cases, dividend stocks are heavily included in the best strategies for retirement planning, because of their stability coupled with their interest. They can be doubly as safe and equally as lucrative as popular growth stocks in the long term.

Dividend stocks are not immune to the market, however, and must be looked at in the same qualitative terms. It is important for a stock to have a high yield dividend as well as a significant dividend growth rate over past years. This ensures that the stock is not stagnant.

Wal-Mart (NYSE: WMT) should be looked at as a lucrative investment in these terms. Its dividend yield is 2 percent with a dividend growth rate of 27 percent over the past five years. Similarly, PepsiCo (NYSE: PEP) is attractive with a 3 percent dividend yield and a five year trailing growth rate of 18 percent. Intel (Nasdaq: INTC) has the same growth rate of 26 percent with plenty of room to grow further.

Among the highest yield stocks are Altria (NYSE: MO) with 6.9 percent, AT&T (NYSE: T) with 5.9 percent, and McDonald’s (NYSE: MCD) with 3.5 percent dividend yield.

Canadian divi#dend#pay#ing#sto#cks are also in vogue, due to their relative inexpensiveness. Husky Energy Incorporated (HUSKF.PK) has a five year trailing dividend growth of a whopping 107 percent. The dividend of EnCana Corporation (ECA)has similarly risen 82 percent.

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