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5 Dividend Stocks Itching to Pay You More

Tickers in this article: M FDX GPS UPS MMM LO

While UPS' balance sheet does carry considerable leverage, it's not out of line with what investors should expect from such a capital-intense industry. With ample cash coverage for its obligations, UPS looks well positioned for a dividend hike in the next quarter...

3M MMM ChartMMM data by YCharts

(MMM) 3M (MMM) may be best known for blockbuster products like Scotch Tape and Post-It Notes, but the firm has been working hard to expand its product portfolio in recent years. Other big 3M offerings include products as diverse as industrial adhesives and computer screen security devices -- that wide mix of broad appeal office supplies and higher-ticket niche offerings makes 3M more attractive than its average peer in this market.

To grow its offerings, 3M has been pursuing big acquisitions, deploying some of the $6.5 billion in cash and investments that the firm has on tap. Growth by acquisition is a relatively new approach for 3M, but it shows significant promise for boosting the firm's top line numbers, particularly on this end of the business cycle. Historically, innovation has been one of the biggest keys to 3M's success. More recently, it's also managed to reinvent and modify its most popular products, squeezing extra life out of offerings that have ample competition creeping in.

Overseas growth remains a big opportunity for 3M, even though the firm already has exposure abroad. The firm already enjoys deeper margins in emerging markets, and expanding its offerings in regions where it already has distribution channels makes a lot of sense. Financially, 3M's balance sheet is net cash positive, with ample liquidity. That should help pave the way for a dividend hike in the next quarter.

Right now, 3M pays out a 59-cent quarterly dividend for a 2.68% yield...

The Gap GPS ChartGPS data by YCharts

Apparel firm The Gap (GPS) reported good numbers and an improved outlook in last night's Q3 earnings call, spurring a boost in buying activity this morning. Gap owns a handful of brands in addition to its self-named store chain -- Old Navy, Banana Republic and Athleta are just a few of them. All told, Gap owns more than 3,000 stores in North America, Europe and Japan. And the firm franchises another 200 locations in emerging markets like the Middle East and Southeast Asia.

Even though the apparel business is supremely competitive, Gap has done a good job of staying one step ahead of the game. The firm's brand is strong, and it's stayed ahead of consumer fashion tastes by catering to a less volatile demographic: young-to-middle aged professionals whose preferences haven't changed much in the last decade or so. While other brands do step into more fickle consumer groups (like Old Navy's focus on a much younger crowd), the firm approached those markets cautiously, the same way it's handling international growth.