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In the wake of the financial meltdown, it can be hard to place any trust in the financial sector. However, there are actually some hidden diamonds among the rubble. Taking a position in high yielding dividend stocks allows you to compound your earnings by reinvesting them in a stronger position in the stock, increasing your returns over time and creating a snowball effect. Having a few solid long term positions that pay high yield dividends also affords your portfolio some protection against possible losses taken on your higher risk investments. The following stocks are worthy of consideration for your long term strategy.

MFA Financial (NYSE:MFA) is an extremely high yielding REIT that hasn't moved more than $3 per share in the last ten years. However, in order to receive the classification of a REIT, a company must pay out at least 90% of its revenue in dividends, making this the perfect buy due to a steady yield of around 14%. Its quarterly payout has been solid at $0.25 per share, which would provide an additional 35 shares per quarter for every 1,000 shares owned if you reinvested your dividend.

Because MFA Financial hasn't shown very much flux at all in its history, this 14% yield will continue to strengthen your position over time as the dividends compound. It runs the chance of yielding even higher returns if the stock should make a sizable bullish move at some point in the future. The strength of this stock lies in its ability to provide steady gains and act as a hedge, if needed, against other high risk investments.

American Capital Agency (NASDAQ:AGNC) is another solid REIT established in 2008 that provides a 19% yield on quarterly payouts of $1.40 per share, which is a payout ratio of just below 1.0. American Capital is a different kind of REIT that invests solely in collateralized mortgages and agency pass-through securities. It has shown nothing but growth since its beginnings. The company pulled in profits of $35 million in 2008 followed by $119 million in 2009 and $288 million in 2010. While the company is only three years old, I still think that this is a solid buy for the long haul due to the fact that it has already established consistency and profitability in such a short period of time.

Chimera (NYSE:CIM) is another healthy REIT that has shown three profitable years and quarterly dividends that pay a yield of 15% at a 1.0 payout ratio. What I like most about Chimera is its low buy in at $3, while it produces dividends of $0.11 or more per share each quarter to allow investors to develop a strong position in the company very quickly. Its increasing profits each year also show me that it will be able to continue paying its dividend, which may jump over the next two years to produce an even higher yield than it already does.

The firm produced profits of $323 million in 2009 and $533 million in 2010 to come back from a $120 million loss in 2008. This signals that Chimera is headed in the right direction and is gaining much needed momentum. This is definitely a buy for me, as I believe that Chimera can secure consistent revenues at its current yield of 15% and hold there for a long time.

First Niagara Financial Group (NASDAQ:FNFG) is a little more of a risk than the others after its stock plummeted from $15 per share to $10 during the second half of 2011. It pays out a quarterly dividend of $0.16 per share at a payout ratio of 0.84 to produce of yield close to 7%. However, I am concerned about reinvestment in a company that is losing its value rather than retaining it or producing a gain. Its dividend makes it an attractive prospect, but I don't think that it is stable enough to take a position in at this time and I would prefer to look elsewhere.

Over the past two years, we have seen Banco Santander (STD) shed 50% of its value, falling from $16 per share to $8 presently. This has made me decide to move past the 6% yield it provides on dividends. Its last three payouts have been a bit sporadic as well, moving from $0.12 per share to $0.15 and then back to $0.12 again. This shows inconsistency and possible instability that has me wanting to walk away from a position in this Spanish bank. Banco Santander has produced consistent profits of $12 billion or more per year, and so I would definitely watch this stock. But it is just too unreliable to warrant an investment at this time.

The biggest winner here is obviously American Capital, although in terms of initial investment it would be Chimera. Chimera is much easier to get into at $3 per share and it has room to grow. MFA Financial serves as the perfect long term investment because it pays out a 14% yield and never moves, giving guaranteed returns that compound each quarter if you reinvest. While the REITs look great, the two banks, First Niagara and Banco Santander, don't provide enough of a dividend to justify each company's steady decline in stock value.

Source: 5 Stocks To Consider For Your Long-Term Dividend Strategy