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10 Top Dividend Stocks Increasing Payouts

Stocks in this article: DVY IDV GE WU HON TYC OXY WY UPS NUE PCAR WFMI VZ JNJ MRK KFT ^DJI RDS-A MT X AKS

(Top dividend stocks report updated with Nucor and Honeywell guidance, and broker action on Whole Foods.)

NEW YORK ( TheStreet) -- General Electric (GE), Western Union (WU) and Whole Foods Market (WFMI) joined a roster of companies raising their shareholder payouts in recent weeks .

Dividend activity has picked up in recent months as companies begin to regain some sense of stability in the state of the economy, and visibility of future earnings growth. The iShares Dow Jones Select Dividend (DVY), an exchange-traded fund that tracks the Dow Jones U.S. Select Dividend Index, is up 13% so far in 2010, and up nearly 12% year-over-year.

>>General Electric Raises Dividend

With record cash in corporate coffers, investors have been egging on corporate management teams to return value to shareholders in the form of dividend checks -- and a growing number of companies are listening.

Over the last 36 years, dividend stocks outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, according to a study from National Data Research.

Dividend investing is "a sustainable strategy that will be a key driver for performance and total return in 2011," said Lawrence Glazer, Managing Partner with Mayflower Advisors, in a recent appearance on CNBC. Glazer encouraged investors to reconsider top dividend-paying "Dogs of the Dow" such as Verizon (VZ), Johnson & Johnson (JNJ), Merck (MRK - Get Report) and Kraft Foods (KFT), blue chips that have offered decades of dividend increases and sustainable payouts, many with stronger yields than 10-year treasury notes.

Verizon, which recently increased its quarterly dividend by 2.6% to 48.75 cents per share , offers an annualized dividend yield of around 5.73%; Johnson & Johnson 3.49%, Merck 4.22% and Kraft 3.77%.

Glazer also tapped the iShares Dow Jones Select Dividend and iShares Dow Jones International Select Dividend Index Fund (IDV) ETFs as deserving of consideration for a sound investment strategy that includes diversification plus additional tax efficiency. The DVY yields around 3.45% while the IDV around 4.33%.

Here is a breakdown of 10 dividend stocks increasing their shareholder payouts in recent weeks, ranked by average daily volume.

(Stock quotes and dividend yields are based on closing prices on Dec. 10, 2010.)



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