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5 Dividends That Are About to Get Bigger

Tickers in this article: KO ED PX OXY CMCSA

5 Dividends That Are About to Get Bigger

BALTIMORE ( Stockpickr) -- Earnings season keeps dumping dividends at investors' doorsteps this quarter, a welcome boost given the correction course that Mr. Market's been stuck in for the last month and change.

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Regardless of how most investors feel about stocks right now, companies have more cash and bigger profits than ever before -- two facts that help ensure bigger dividend payouts for income-seekers. That's significant, especially given interest rates at historic lows right now. As corporate dividends keep beating the returns investors can find on "safer" alternatives like treasuries or even bonds.

The contrast is pretty extreme: many firms now have higher yields on their stock price than they do on their own debt.

But this week, instead of chasing yield, we'll focus on stepping in front of dividend hikes for the coming quarter. In other words, these five firms are getting ready to boost dividends; they just don't know it yet.

In the past few months we've had some stellar success in finding future dividend hikes just by zeroing in on a few key factors. Now we'll look at our crystal ball and try to do it again.

For our purposes, that "crystal ball" is composed of a few factors: namely a solid balance sheet, a low payout ratio, and a history of dividend hikes. While those items don't guarantee dividend announcements in the next month or three, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about this late-2012 rally.

Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.


First up is cable giant Comcast (CMCSA) . This $100 billion cable provider is having a standout year in 2012, up more than 58% since the first trading day in January. As the biggest cable firm in the country, Comcast reaches 53 million households, with around half of them paying TV subscribers. The firm also boasts 19 million internet customers and 10 million phone subscribers. Comcast boosted its presence in the content business last year when it bought 51% of NBCUniversal.

When it comes to Comcast's upside potential, the three most important factors are: network, network, and network. Comcast's cables span 40 states and Washington, D.C., reach that gives Comcast significant advantages over its rivals. Because cable has significant bandwidth, Comcast has been able to ramp up its offerings without having to lay new cable -- compare that to Verizon's (VZ) FiOS program, which has spent mountains of cash to lay fiber optic cable to every house it serves. That makes the breakeven time a whole lot shorter for Comcast, and it gives the firm more leeway in its pricing.