Imagine buying a used paperback book for $5, reading the first few chapters, and then finding a $1 bill tucked neatly between two of the pages. Because the book came with a little cash, the net purchase price essentially drops to just $4.

That’s essentially what we see with cash-rich companies like GPS-maker Garmin for example. The company holds $13.84 per share in cash with zero debt. So a potential acquirer that bought all the outstanding shares at the recent price of $46.25 would really only end up paying about $32.41.

#-ad_banner-#Of course, buying a few shares doesn’t mean you can march in and demand payment. But as a stockholder, you do have a pro-rata claim on that cash. And while you can’t spend it freely like the $1 in the book, it can still be used in numerous ways to enhance shareholder value. 

That money can be used to repurchase stock, to make a special dividend distribution, to pay down debt, to upgrade equipment, to fund an acquisition… you name it.

Equally important, having access to that much cash negates many of the financial worries that can cripple a stock. Expanding companies need capital, and raising it isn’t always easy (or cheap). Some cash-strapped companies have no other option but to issue more common shares or borrow money at exorbitant rates.

So deep cash balances not only yield positive changes, but they can help companies avoid negative ones. Simply put, cash is the lifeblood of a business. That’s why I invest just as much time analyzing the balance sheet as I do the income statement.

Here are a few more companies that have a nice stockpile of cash and a dividend yield above 3.5%:

Of course, cash can’t be looked at in isolation. First, you need to determine whether the company is making deposits or withdrawals each quarter.

There are many small companies that might have $20 million in cash on the books, which seems good, until you realize they are burning through it at the rate of $2 million per month. So the cash reserves could be exhausted in less than a year without another infusion.

Second, consider that cash is sometimes restricted for a variety of reasons. Also, don’t forget to weigh cash against debt. AT&T (NYSE: T) has $1.4 billion in cash — but owes $76.2 billion to lenders.

Finally, keep in mind that cash should be measured relative to the size of the company.

That said, the companies in the table above should be a great place to start your research in finding reliable, cash-rich — and high-yield — dividend payers.

Note: Speaking of reliable dividend payers, have you seen this month’s “High-Yield Stock Of The Month”? Unlike ordinary common stocks which can experience dividend cuts at any time, this preferred stock carries a ‘locked-in’ and staggering 10.2% yield. You can learn more about this special high-yield investment by viewing this presentation.