Dividend Stocks for the Week

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By Jonas Elmerraji

BALTIMIORE (TheStreet) -- Up one day and down the next -- it seems as though investors can't make up their minds. But when the stock market churns and volatility spikes, they can still find solace in dividends. That's because investing in income stocks is one of the few ways to collect earnings from a portfolio when the market isn't moving higher.

The companies that actually increase their dividends during a tough economy send an even stronger signal to investors. With cash hard to part with when business is slow, management's decision to let shareholders have a bigger cut tells Wall Street that a company is in good enough financial shape to weather the storm.

Income investors aren't the only people who should focus on companies that hike their dividends. Historically, companies that pay dividends materially outperform those that don't, and when the market turns bearish, dividends could be the only semblance of return that investors see for a while.

That's why every week Stockpickr reviews recent dividend declarations and compiles a portfolio of dividend-increasers. These stocks represent some of the most enticing investments on the market right now.

As real estate values have fallen through the floor, real estate investment trusts have been eschewed by risk-averse investors. But after increasing its dividend 25% to 45 cents per share, Digital Realty(DLR Quote) is beginning to attract investor attention once again. The REIT focuses on the technology niche, buying properties such as data centers in such tech-centric places as Silicon Valley and Northern Virginia.