Value Stock-Picking, Week 1: How to Find Top Dividend Plays

So your first assignment is to pick the five best dividend plays.

Step 1. On Stockpickr, create a portfolio called "Dividend Plays: [Your Stockpickr Username]." (To create a portfolio on Stockpickr, you'll need to first log in. If you're currently not a Stockpickr member, you can register at www.stockpickr.com/register.) Make sure to turn the "Portfolio Tracking" feature on, so you can monitor stock prices over time.

Step 2. Pick five stocks from the Stockpickr portfolios that focus on dividends. Search Stockpickr for the many portfolios that include the word "dividend." In addition to the Top Dividend Raisers by PEG, look at portfolios such as:

• Stocks Chosen By Bear Stearns With Dividends Greater Than 4%, a portfolio of stocks selected by the Bear Stearns Global Equity Linked Strategy team that have a projected dividend yield of 4% or greater.
• S&P Dividend Aristocrats, which consists of companies in the S&P 500 Stock Index that have consistently increased their dividend payouts. When a company increases its dividend year in and year out, that's a sign of both financial health for the company and increasing profit for you.
• Top 15 Stocks Based on Projected Three-Year Dividend Growth, a portfolio based on Bloomberg's analysis of the companies' growth -- both of stock price and dividend -- over three years.
• Dividend-Paying Soft Drink Stocks, one of many portfolios that start with a sector and narrow the selection based on whether they pay a dividend or not. If a company is both in an attractive sector and pays a dividend, that sweetens the investment even more.

Make sure to read the "Reason for picking" box for each stock in the portfolio as well for additional information. Determine whether you agree with the reasoning.

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