5 Stocks Ready to Boost Dividends
Companies have been boosting dividends en masse for the last few year, driving payouts higher as corporate earnings and holdings of cash grew to all-time highs. The result is the biggest cash dividend payout ever from S&P 500 stocks than ever right now and an average dividend yield that's higher than it's been any time in the last 20 years. So clearly, now's not a bad time to be an income investor.
But the downpour of dividend hikes is slowing a bit this quarter. Only a handful of firms opted to increase their dividend payouts last week, vs. nearly a hundred that opted to merely maintain it. That's a much bigger difference than investors have been used to lately -- but it doesn't mean that you can't find attractive dividend hikers in this market.
That's why it's time to take a look ahead at dividend hikes on the horizon,
Investors have taken on a renewed interest in the last couple of years, after being unceremoniously reminded in 2007 and 2008 that those quarterly checks contribute a whole heck of a lot of Mr. Market's historical returns. According to research from Wharton Professor Jeremy Siegel, reinvested dividends account for 97% of total market performance. So it shouldn't be a big surprise that finding dividend increasers is a big priority.
Today, we'll look into the crystal ball to try and find firms likely to hike their payouts in the quarter ahead.
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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 two, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about this 2012 rally.