In December of 2008, AT&T raised its dividend for the 24th consecutive year, with a new quarterly payout of 41 cents a share, adding up to $1.64 for the full year. AT&T's dividend will eat up 78% of its expected 2009 earnings, which is nowhere near as safe as we would like. But AT&T deserves some leeway here because of its stable business, which also has room for price increases for its services. Even though the earnings don't come to twice the dividend, AT&T does pass the free cash flow test, as it generated 43% more free cash flow than reported net income over the past 4 quarters. It's debt is also rated in the A-range by the major ratings agencies, and it has a terrific CEO in Randall Stephenson.

4. Powershares Financial Preferred Portfolio ( PGF) (PGF): This is not a stock, but an exchange-traded fund or ETF that yields roughly 11.6% and follows 30 preferred stocks in the financial industry, allowing you to gain exposure to multiple different companies without concentrating too heavily on any particular one. Preferred stocks are like a hybrid security that's half-bond and half-stock. First, the dividends are fixed, like a bond. And if there's not enough money to pay all of a company's dividends, preferred holders get their money before the common stock dividend can be paid, the same as if the business is liquidated--preferred shareholders come before the common when it comes to receiving any available proceeds from liquidation. In return, you usually give up voting rights and some potential upside if the common stock really takes off--like we saw in the financials after the bottom in early March of 2009.

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