The Ultimate Dividend Playbook
Josh Peters, Morningstar
(John Wiley & Sons: $24.95)

This book takes us through myriad types of data, showing why dividends are reliable as an indicator of a stock's soundness. It also tells us why using them as a gauge ensures better long-term returns than capital gains alone.

Peters' points have traction. Financial analysts have long paid close attention to dividends, which are as important to a company's investment potential as any capital-lettered performance metric.

However, there's a clear downside to developing dividend monomania: Growth companies don't tend to pay dividends, as they need this money for, well, growth. Those eschewing non-dividend companies won't get the benefit of rapid growth, especially the early, juicy variety.

Peters lists banks among key dividend payers. Peters also lists utilities, which reliably pay dividends, but are perennially regarded as defensive stocks.

Of course, he wouldn't deny that a diversified portfolio would not naturally be limited to mature-stage, dividend-paying companies. And he convincingly shows in this well-written volume why—regarding those established companies—dividends are so important.