When interest rates began dropping about 15 years ago, Grandma became dismayed over the puny interest rates she was offered on CDs. She depended upon interest income to live comfortably and needed to earn more than three percent on her money. So she asked me to suggest some safe stocks she could buy that paid juicy dividends.

Up to that point in time, I was totally focused on buying stocks for capital appreciation purposes only, but I agreed to help her. After thinking about her situation, I created the VectorVest Dividend Advisory. This service was designed to analyze, sort and rank stocks for dividend yield, safety and growth via the VectorVest Yield-Safety-Growth-Vector, YSG-Vector. When VectorVest ProGraphics was released in 1995, the VectorVest Dividend Advisory was included as part of the package. Unfortunately, this part of our service just doesn't get the attention it deserves.

You can make a lot of money on the stocks you own even if their prices don't go up. You just have to know how to do it. The first thing you need to do is pick good, dividend paying stocks. You can do this by accessing Stock Viewer and sorting by YSG-VECTOR, Desc. Note that as of Thursday night, Terra Nitrogen was the highest ranked stock. Wow, it's paying annual dividends at the rate of $14.52 per share with a yield of 12.08%. Great, but its Dividend Safety, DS, is only 45 on a scale of 0 to 99, and that's lower than I usually like to see. So what's next?

Cal-Maine Food, CALM. It's paying only $2.06 per share, but has a Dividend Yield, DY, of 5.10%. That's not bad and it has a DS of 87, which is very good. Now, how could you collect twice as much in dividend payments from this egg seller?

The easiest way to do this is to simply buy twice the number of shares. A lot of people don't know it, but they can double the number of shares they own by using a margin account. With a margin account, your broker will lend you the money to buy the additional shares of stock. Of course, he'll charge you interest on the loan, but that expense is tax deductable. Moreover, you don't have to buy the same stocks you already own. You can buy any stocks you wish. So why not buy stocks that pay higher dividend yields than the ones you already own? You might even be able to triple your dividend receipts. But hold on, there's more you can do to put those stocks to work for you.

Believe it or not, you can usually receive more money on a quarter-to-quarter basis by selling out-of-the money covered Calls than you can from receiving dividend payments. If you know how to trade options, try it. If you don't trade options, I'll try to explain this trade next week. If you buy dividend paying stocks on margin and sell out-of-the-money Covered Calls, you'll have a Cash Machine.