In the decade that ended Dec. 31, 2010, the Standard & Poor's 500 dropped 4.7 percent. Yet if dividends are included, the stock index returned a positive 15 percent.

Such is the appeal of stocks that pay their shareholders each quarter. Even if stock prices stagnate, dividend stocks provide income--usually more lucrative, if less secure, than bonds, which sport record-low interest rates.

Bloomberg.com asked BlackRock's Robert Shearer, manager of one of the largest and top-rated dividend mutual funds, how he picks winners. Click ahead to see how he does it, and for screens of dividend stocks based on his advice and Bloomberg data.