3 High Paying Dividend Stocks on the ASX recommended by the Motley Fool

According to Ned Davis Research , during periods of market decline between 1972 and 2010, dividend payers outperformed non-dividend payers by 1.5% per month.

that means the difference between turning a $100,000 portfolio into $2.4 million versus just $174,000.

• ·         There is a direct correlation between high dividend yields and attractive total returns."
• ·         High dividend yield stocks were also less volatile in terms of the standard deviation of returns."
• ·         high dividend yield stocks outperformed other value strategies as well as the overall stock market return in declining markets."

compounding returns over long periods of time. Long-time dividend investors are surely on board with Albert Einstein, who supposedly called compound interest "the most powerful force in the universe."

Franking Credit advantage:- What that means is that a 6% term deposit provides a significantly inferior after-tax cashflow to a 6% dividend yield. 

In the US, a dividend yield (the annual dividend divided by the share price) of 2.5% to 3% is considered quite good. In Australia, sustainable yields of 5%, 6% and 7% are quite common.

Well-chosen shares can deliver something that a bank account can never offer - growth.

and it's very likely that a well-bought company with that sort of dividend growth would also have seen a (roughly) corresponding increase in share price.

3 interesting stocks 

Telstra (ASX: TLS)

 A nationally dominant telecommunications carrier with almost universal brand recognition. A business that has been revitalised through new management, that has been refocussed on the customer, and one that is likely to receive $11 billion (in net present value terms) from the government for giving up some of its infrastructure.

The growth in data consumption - both fixed-line and mobile - is strong and likely to continue, and this company has the largest mobile network and is leading the charge into the newest mobile data technologies.

Network application services grew earnings strongly in the last half, as the company's cloud computing and data centre services gathers momentum. This division could be bringing in billions in future, and is likely, along with mobile, to represent the majority of the company's earnings.

It also owns 50% of Foxtel, in conjunction with News Corporation (ASX: NWS). In the last year, Telstra's profit was boosted by a $155 million dividend from Foxtel. Foxtel is focusing on adding new subscribers and has launched Foxtel Go, which allows users to watch Foxtel TV and movies on iPads and other tablets - anywhere.

Telstra is also not limited to growth in Australia. It has a small but growing presence in Hong Kong, China, India, Singapore and Japan, as well as owning an undersea cable between Sydney and Hawaii, which it can rent out to other ISPs. Demand for data is set to grow at 66% a year, according to a recent report from Cisco (Nasdaq: CSCO).

Overall, though, Telstra is doing the right things to shed (or have taken from it) the low-growth and perishing legacy businesses. The directories (phone book) business can't be long for this world, and the Trading Post is now purely digital. The NBN will assume Telstra's fixed broadband business.

A freed up and focussed Telstra is readying itself for a bright (and increasingly mobile) future.

Telstra's dividend is almost the stuff of legend these days. The holy grail that is the 28-cent-per-year payment has almost become seen as a divine right - and would only be lowered by management as an absolute last resort, such is the expectation of its retail shareholder base.

That 28-cent dividend translates to a dividend yield of around 5.2% based on recent prices - and that's before franking. It certainly makes a 3% term deposit look stingy. That 5.2% grosses up to nearly 7.5% when you include those franking credits.What’s more, the company just increased its interim dividend for the first time since 2005!

Telstra has come a long way since March 2012 when the share price was $3.25, and even further since its shares changed hands for under $2.60 in late 2010. The share price has been on a stellar run since then - 

Thorn Group (ASX: TGA)

You've seen the 'Rent, Try, $1 Buy' ads from Radio Rentals (and Rentlo in South Australia), and Thorn Group is the company behind them.

For many Australians, buying whitegoods (like fridges and washing machines) or browngoods (televisions and the like) outright is often too expensive or inconvenient - and that's where Thorn comes in.

Its business model sees the company rent out products to consumers from its familiar stores, and an in-house financing arm looks after the contracts and collections. Breaking down a large purchase into small weekly payments makes the transactions easier for its customers - and vastly more profitable for Thorn.

Amcom (ASX: AMM)

The internet has been around in its current form for less than 20 years, but already it feels old hat. It's seen off Encyclopaedia Britannica in its original, printed form, created brand-new companies and industries, including the likes of Amazon.com (NASDAQ: AMZN), Apple's (NASDAQ: AAPL) iTunes store, and has put significant holes in the business models of our old media companies such as Fairfax (ASX: FXJ).

In doing so, the new industries have bought with them new and better ways of doing business. Chief among those is the concept of so-called 'big data', where companies are increasingly sending enormous amounts of business information across wide networks and are mining that information for insights into their customers and better ways of doing business.s.