One of the best ways to protect your investment portfolio is to include some dividend paying stocks. And, in the current situation, we all know that any sort of economic recovery is going to be a long, slow slog. Using dividend paying stocks to shore up your portfolio can be a good way to invest in solid companies likely to whether further economic storms while generating an income stream that can continue even during down cycles. (Of course, the dividend may be cut, but you are still likely to get something.) If you are looking for some solid dividend paying choices for 2011, here are 7 contenders:

1. Procter & Gamble (PG)

Even during tough economic times, consumer goods like toilet paper and toothpaste are in demand. So, no matter what happens in 2011, Procter & Gamble is likely to do just fine. It’s size and market share lend it strength. Even though PG does not have the highest yield, its 3% dividend is still healthy — and likely to present a little more stability than a flashier consumer goods company.

2. Intel (INTC)

Tech stocks can be a little scary in many cases, but Intel is a solid company with good market share. Indeed, it practically has a corner on the processor market. As the economy continues its slow recovery, Intel should continue to make up ground. A great tech option that provides lower volatility than many other tech stocks. Plus, it has a solid 3% dividend.

3. Coca-Cola (KO)

Recently, Coke upped its dividend payout, putting it at close to 3.5%. The fact that this venerable blue chip has boosted its dividend is encouraging, pointing to confidence felt by company heads. And there is good reason to be confident. With a global reach, Coca-Cola stands to remain solid — even if things don’t improve greatly. Plus, Coke’s DRIP is a great way to automatically continue growing your wealth.

4. Verizon (VZ)

With rumors flying of an iPhone for Verizon in 2011, this could be a good choice, especially if you are looking for something with a little higher payout to add to your portfolio. Verizon offers a 6.7% payout, which is attractive. Plus, Verizon’s constant efforts to improve its coverage and services (especially its efforts with fiber optics) could mean that the company is positioning itself for the long haul.

5. Bristol-Myers Squibb (BMY)

There will always be a need for pharmaceutical products and other health care services. The health care reform passed earlier this year practically guarantees that there will be increased demand for health care products and services in the future. With some portions of health reform already in place, and with aging Baby Boomers, the next decade should prove profitable for companies like Bristol-Myers Squibb. Plus, the 5% dividend payout is attractive.

6. Yum! (YUM)

With China the second largest economy in the world, its financial might and future influence cannot be ignored. And Yum! is doing well in China. Its dividend payout yield of around 2.10% may be rather modest, but there is a strong likelihood that dividends could increase. And with Yum! looking to be a sleeper success, now might be a decent time to get in on it.

7. Eni S.p.A. (E)

If you want to add a little foreign diversity to your portfolio, it might be worth it to consider Eni, a company based in Italy. Eni is involved with oil, gas, petrochemicals, engineering, oilfield services and power generation. Eni’s reach is global. No matter how much emphasis is put on clean energy development, we are stuck with fossil fuels for some time, and Eni offers an interesting option. The next payout from Eni is expected to be about 1 euro per share.

Disclosure: I invest in in KO, INTC and VZ.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

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Miranda

Miranda

Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.