NEW YORK ( TheStreet) -- Dividends are a critical component of total stock market return, accounting for 43% of the S&P 500's return from 1990 to 2010. Unfortunately, the dividend yield of the S&P 500 has fallen to 1.85% (approaching 120 year lows) -- income investors might find better opportunity in a diverse basket of carefully chosen stocks.

Each of the seven stocks listed below has a higher dividend yield than a S&P 500 index fund, has a buy rating from TheStreet Ratings award-winning stock rating model and will trade ex-dividend tomorrow (this means that you must purchase the stock today to qualify for the next dividend payment).

TheStreet Ratings stock-rating model favors defensive investments with a bias towards conservatively financed companies that have demonstrated a history of favorable shareholder returns.

B&G Foods

B&G Foods ( BGS) manufactures, sells and distributes a diverse portfolio of branded and shelf-stable food products.

Dividend Yield: 4.05%

4-Year Dividend Compound Annual Growth Rate: 10.12%

Rated "A (Buy)" by TheStreet Ratings: B&G Foods' gross profit margin for the first quarter of its fiscal year 2011 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. B&G Foods is extremely liquid. Currently, the Quick Ratio is 2.71 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 7.42% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

Deere

Deere ( DE) operates in three major business segments: agriculture and turf, construction and forestry, and financial services.

Dividend Yield: 1.71%

5-Year Dividend CAGR: 8.71%

Rated "B (Buy)" by TheStreet Ratings: Deere's gross profit margin for the second quarter of its fiscal year 2011 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry.

At the same time, stockholders' equity ("net worth") has greatly increased by 31.36% from the same quarter last year.

Dow Chemical

Dow Chemical ( DOW) is engaged in the manufacture and sale of chemicals, plastic materials, agricultural, advanced materials and other products and services. It is also engaged in the property and casualty insurance and reinsurance business.

Dividend Yield: 1.68%

5-Year Dividend CAGR: (16.74%) Negative

Rated "B- (Buy)" by TheStreet Ratings: Dow Chemical's gross profit margin for the first quarter of its fiscal year 2011 has increased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. Dow Chemical has average liquidity. Currently, the Quick Ratio is 1.07 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year. During the same period, stockholders' equity ("net worth") has increased by 12.75% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

Kraft Foods

Kraft ( KFT), through its subsidiaries, manufactures and markets packaged food products including: snacks, beverages, cheese, convenient meals and various packaged grocery products.

Dividend Yield: 3.38%

5-Year Dividend CAGR: 3.86%

Rated "B+ (Buy)" by TheStreet Ratings: Kraft Foods' gross profit margin for the first quarter of its fiscal year 2011 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. Kraft Foods has very weak liquidity. Currently, the Quick Ratio is 0.47 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 9.37% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

York Water Company

York Water Company ( YORW) works to meet or exceed safe drinking water standards and distribute water.

Dividend Yield: 3.05%

5-Year Dividend CAGR: 2.93%

Rated "A (Buy)" by TheStreet Ratings: York Water's gross profit margin for the first quarter of its fiscal year 2011 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. York Water has strong liquidity. Currently, the Quick Ratio is 1.63 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.96% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

Molex

Molex ( MOLX) manufactures electronic components, including electrical and fiber optic interconnection products and systems, switches and integrated products.

Dividend Yield: 2.68%

5-Year Dividend CAGR: 17.61%

Rated "B+ (Buy)" by TheStreet Ratings: Molex's gross profit margin for the third quarter of its fiscal year 2011 has decreased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. Molex has average liquidity. Currently, the Quick Ratio is 1.41 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 9.04% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

Illinois Tool Works

Illinois Tool Works ( ITW) is a manufacturer of a range of industrial products and equipment.

Dividend Yield: 2.47%

5-Year Dividend CAGR: 11.63%

Rated "B (Buy)" by TheStreet Ratings: Illinois Tool Works' gross profit margin for the first quarter of its fiscal year 2011 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. Illinois Tool Works has average liquidity. Currently, the Quick Ratio is 1.25 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 18.70% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

>>To see these stocks in action, visit the 7 Buy-Rated Dividend Stocks portfolio on Stockpickr.

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This article was written by a staff member of TheStreet.

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