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Here's 3 Dividend-Paying Power Plays for Your Portfolio

Stocks in this article: CZRVZTGEMSFTGOOG

NEW YORK (TheStreet) -- Owning strong companies that distribute above-average dividends when the overall market is moving higher is a powerful way to get free portfolio insurance in case the market takes a breather.

Regardless whether your dividend payers are gaining value, as long as they continue to issue dividends you get paid. Receive enough dividends and your stocks become risk-free cash printing presses once a quarter.

With that in mind, if you can find stocks that pay significant dividends in a bullish trend, you have a recipe to stack the odds in your favor. We don't know what the results will be on any given trade, however, in the same way Caesars (CZR) casino prospers we do our best to gain an edge and let the law of averages work in our favor.

Every week I examine the various characteristics of the hundreds of possible dividend plays. These are my best candidates right now for long-term buy and hold dividend payers based on overall risk, yield, and my outlook on continued appreciation.

VZ Dividend Yield (TTM) Chart

Background: Verizon Communications (VZ), formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of high-growth communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the world's largest provider of print and on-line directory information.

Price To Book: 3.5

Forward Estimated Earnings Payout Percentage: 57%

I've featured Verizon's competitor AT&T (T) as a strategic dividend play much more often than Verizon, albeit it doesn't necessarily suggest AT&T is that much better. I don't have Verizon in my area (wireless yet, not landline or Internet) and given the coin flip between the two, I went with the one I know best.

This time, however, Verizon is outshining AT&T based on the many metrics examined, as Bret Jensen pointed out in Real Money.

This stock currently has an annualized dividend of $2.12, yielding 4.5%.

While not the worst it could have been, the shares still lost 3.3% in the last month and are down since the start of the year. I think the dip creates a buying opportunity. Granted, the wireless space is volatile, but that's mitigated through the dividend and overall business.

In the last 12 months, the shares have modestly moved higher. The one-year return is 4.8% before dividends, and the average analyst target price for Verizon Communications is $54.

Also, analysts as a whole like this company. Currently, Verizon Communications has 20 buy recommendations out of 31 analysts covering the company, along with 11 holds, and no analysts recommend selling.

On average, Verizon raises its dividend once a year. This holds true even during 2009 and 2010 when many including banking and real estate companies cut or altogether stopped paying. If you bought Verizon 10 years ago, the dividend was about $1.38 in 2004. It hasn't doubled yet, but it's getting close. That's the power of buying a high yield growing stock.

Short interest above 4% is not enough to sound he alarms, but above 5% it places renewed hesitation in allocating capital in the company. Short-sellers are among the brightest and most informed market participants, and if they turn sour on a company it is likely for a valid reason. If the short interest ascends above 6%, you may want to scrutinize changes within the space. Otherwise, the prevailing 4.2% of the float short is relatively meager and not a major concern. VZ Payout Ratio (TTM) Chart

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