5 Dividend Stocks to Fight Off the Fiscal Cliff
Just on Wednesday, for instance, wholesale club Costco (COST) announced a special $7 per share dividend payout for investors that prompted 6.3% rally in shares that day. Clearly, investors are rewarding companies that opt to give them cash ahead of the looming possibility of a tax hike on dividend income. Costco isn't alone, even if its $3 billion special dividend is the biggest of the bunch -- a handful of firms have announced special dividend payouts to reward investors before the cliff.
But even if you bought shares of Costco now to take advantage of your $7 payout, you've already missed out on the capital gains benefits from the announcement. That's why we're trying to step in front of the next set of dividend hikes this week.
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 correction.
Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.