Dividends are like cookie dough. You don't have to wait for them to bake, and they taste just as good as, if not better than, the finished product. With fears of dividend tax increases behind us, let's look at five powerhouse dividend stocks to see if they have what it takes to deliver cookie-dough dividends for years to come.

Who's cooking?
Utilities are inherently dividend-oriented companies. They're highly regulated and have stable cash flow, and their growth prospects are pretty much limited to population growth. Dividends make sense as the primary medium through which to deliver value to shareholders, and these companies are known to dole them out in massive servings. Here are five utilities serving up sizable portions:

AT Dividend Yield Chart


AT Dividend Yield data by YCharts.

Atlantic Power takes the cake at 10.3% and has a unique dividend structure that would make most investors salivate. Ignore the 0% on the chart and know that the utility pays C$0.958 every month. The yield fluctuates based on the stock price, but Atlantic has historically had one of the highest yields in town. National Grid's yield brings up the rear, but it's still above average for its sector.

To look past fluctuations in the stock price, absolute dividends tell us whether a company has historically increased the dollar amount that it distributes via dividends:

Company

% Change in Dividend (2009-Present)

Atlantic Power

4.8% 

Exelon

0% 

FirstEnergy

0% 

National Grid

(50%)

Southern

14.3% 

Source: Dividata.com.

National Grid's dividend has bumped up and down quite a bit over the past three years, while Atlantic and Southern have managed steady increases over time. Exelon and FirstEnergy have the same dividends today that they had in 2009, but both utilities took a temporary dip in 2011 and 2012, respectively. Looking ahead, Exelon recently announced that it will slash its dividend by 40% starting in Q2 2013.

Will the cookie crumble?
Dividends can make or break an investment decision, but not all dividends are created equal. I'll examine two different metrics, one to see whether a company is focusing funds elsewhere, and one to examine the sustainability of the dividend itself.

First up: the capital expenditures-to-sales ratio. This simple statistic reveals how much a company is spending on itself. For a growing or renovating utility, this ratio will be high. For steadier companies, we can expect a lower number.

Company

Capex-to-Sales Ratio

Atlantic Power

40%

Exelon

21%

FirstEnergy

14%

National Grid

23%

Southern

26%

Source: Yahoo! Finance.

Atlantic Power's self-investment blows away the competition, but its heavy spending doesn't sync up with its high dividend. FirstEnergy comes in last but still justifies its sizable 5.3% dividend yield -- so long as it's not scrimping on necessary spending.

Now that we know whether each company is attempting to deliver shareholder value through self-investment, let's see if they havecash left over to dispense their dividends:

AT Cash Div. Payout Ratio TTM Chart

AT Cash Div. Payout Ratio TTM data. Sources: YCharts and author's calculations 

The proof is in the pudding, or, in this case, the cash dividend payout ratio. The spread on these companies is enormous and reveals the lengths to which come companies will go to satisfy dividend investors' appetites. Southern is currently paying out 854% of its available cash in dividends, while Exelon coughs up 171% of its piggy bank. Atlantic and FirstEnergy both have negative cash flows, which makes National Grid the only utility with true dividend staying power.

Dividend dough
Having taste-tested our different dividends, you can see how some seemingly sweet deals could leave investors with a sour taste in their mouths. It seems backwards, but dividend-slashing National Grid and soon-to-slash Exelon appear to have the best dividends around. Contrarily, Atlantic shareholders need to watch their dividend with a wary eye, as their profits might soon be burned to a crisp.

As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. Combine this strength with an increased focus on renewable energy, and Exelon's recent merger with Constellation places Exelon and its best-in-class dividend on a short list of top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.

The article Are These 5 Dividends Ready to Crumble? originally appeared on Fool.com.

Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo. The Motley Fool recommends Exelon, National Grid, and Southern. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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