With The stock market dropping and many growth stocks falling out of favor, now is a good time to consider stocks that pay dividends.

The Standard & Poor’s 500 Index’ yield of 2.3 percent about matches that offered by 10-year Treasury notes, and there are stocks of solid companies to be had which pay above that average.

"A focus on dividend-yield strategies is an important part of an investor's tool kit," Rob Arnott, chairman of Research Affiliates, which manages $80 billion of assets, tells The Wall Street Journal.

To be sure, you want to be careful to invest in companies whose dividends are considered safe (i.e. not likely to be cut because of an organization's financial concerns) and to avoid buying dividend stocks at too high a price, which lowers the all-important dividend yield. “They're a little bit overrated today," Arnott says.

While investors have pulled almost $25 billion out of mutual funds as a whole so far this year, they have put $12.6 billion into dividend stock funds, according to research firm Lipper. That’s a four-fold increase for the dividend funds from all of 2010.

Experts advise focusing on stocks that have consistently raised their dividends over time, not necessarily on ones that offer the highest yields, because that former strategy will lead to longer-term benefits. "You should never be taking shortcuts," Ben Inker, director of asset allocation at money manager GMO, tells The Journal.

Mark Barnett, a stock fund manager for Invesco Perpetual, tells the Financial Times that dividend shares in the top one-fourth of most market sectors generally have the best returns. “What we are buying . . . is the growth in the stream of dividends over many years,” he says.

For more specific guidance on the best dividend stocks available, you may want to check out Newsmax's The Dividend Machine newsletter, edited by investing expert Bill Spetrino. More information can be found at www.moneynews.com/newsletters.