5 Household-Name Stocks Ready to Boost Dividends

BALTIMORE (Stockpickr) -- These five household name stocks are about to boost dividends. They just don't know it yet.

Household name stocks, the companies whose names most consumers recognize immediately, have a certain cachet with retail investors. After all, folks are more likely to pile money into stocks of companies that they know intimately, or firms whose products they use every day. For that reason, I'm a fan of looking at what's happening with household names from time to time.

And this summer, there's some interesting stuff going on in a handful of them -- I'm talking about possible dividend hikes.

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The biggest, most stable companies are paying out bigger dividends than ever right now, so investors looking to earn part of their annual returns in cash are getting some stability versus the broad market from household name stocks. Getting cash dividends is great, but finding stocks that can continually pay you bigger dividends is even better.

So how do we spot payers in the future? For our purposes, our "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 stock performance in 2012.

In other words, fundamentally solid companies realize that they need to hike returns for shareholders if they want to keep demand for their stock high. And studies show that, historically, a dividend-centric strategy from management means much bigger returns for your portfolio.

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So far this summer, our track record is pretty good. In the last week alone, the four biggest dividend hikes came from stocks that had appeared in this column. So let's see what else has bigger dividends on the horizon with five new household name stocks that could be about to increase their dividend payments in the next quarter.

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