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When looking for the top dividend paying companies, you might not automatically start thinking about body slams and full nelsons, but, then again, maybe you should, because World Wrestling Entertainment (WWE) has plenty of muscle in its balance sheet, and should be about to perform a smackdown of last years earnings when they report next week, on August 6th.

OK. So maybe WWE doesn't offer the most sophisticated entertainment on the planet, but when you start digging into their numbers, it's clear that this member of the high dividend stocks community has management that takes care of its shareholders. Here's how:

The McMahon family owns Class B shares, which are approximately 65% of the firm's entire outstanding shares. In order to safeguard the company's dividend for common Class A shareholders, in 2008 the family announced that it would forego any participation in the 2008 Q4 and 2009 Q1 dividend payouts.

Suddenly, the dividend payout ratio that looked unsustainable, (over 200%), is actually 98%.

Unfortunately, most of the financial websites are still listing the higher figure. Admittedly, this isn't the lowest payout ratio you'll find, but it's certainly sustainable, for the following reasons:

Unlike its 2008 Q1 report, WWE's 2009 Q1 report didn't include the revenue from WrestleMania 25, a hugely profitable event that set the record for Pay-per-View Sports Entertainment revenue, grossing $43 million. In addition, this live event outdrew the 2004 Super Bowl in attendance, bringing in an additional $8.5 million in ticket and merchandise revenue.

None of this nearly $52 million in revenue was in the Q1 numbers, which is a major reason for Q1's poor comps vs. 2008. This revenue, plus the revenue from the many other PPV/Live events this quarter, should enable Q2 2009 earnings to do a full body slam vs. 2008's Q2 earnings. (Sorry for the wrestling metaphor hype, I just couldn't resist...)

Back on May 1 of 2009, WWE reaffirmed its quarterly payout of $.36/share, and said that the McMahons would receive just $.24 of the $.36/share payout, again taking a backseat to protect shareholders. The interesting thing to note here is that this is probably based on management's knowledge that Q2 earnings will be substantial. After all, if earnings were good, why shouldn't they participate?

WWE's $1.44/share total annual payout is a dividend yield of nearly 11%, at today's $13.25 price/share, a high dividend yield in any book.

The company has a very strong balance sheet, and is virtually debt-free:
Quick Ratio: 4.31 Debt/Equity: .01 Long Term Debt/ Equity: .01

In addition, it is highly profitable, with 43%-plus gross margin.

One other thing to consider here is the fact that WWE gets no respect from Wall St., in spite of the efforts of its founder, Vince McMahon, who is a very astute businessman. I would wager that if the company continues to be ignored by the street, he may eventually take it private again sometime in the future, which, again, would be a sweet deal for shareholders.

Disclosure: Author is long shares of WWE, but he's never worn a spandex body suit, or a face mask.

Source: World Wrestling Entertainment: A High Dividend Stock Due for Big Profits