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Dividend Stocks for the Week

Stocks in this article: CVS SJR IP

BALTIMORE ( Stockpickr) -- With earnings season in high gear, dividend-paying stocks are starting to build speed as well. Although the last few weeks have been quiet for dividend boosts (not surprising given the market holidays that surround year-end), we're finally starting to see companies announce new payouts to shareholders once again.

In the last week, 14 companies announced increases in their dividends. But what's most significant about those yield hikes is who is making them. Last week's dividend increases included a fairly even mix of blue chips and small-caps, a favorable sign that U.S.-traded firms of all sizes are seeing financial improvement.

Of the 14 firms that increased their payouts to shareholders, six had previously increased their dividends during the third week of January 2010. That record of regular increases is a good sign for income investors; it signals a return to dividend normalcy.

Related: Top 10 Warren Buffett Dividend Stocks

Dividend stocks aren't just attractive for their payouts, however; income stocks are historically a superior source of capital gains as well. 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, all while paying out cash to their shareholders, according to a study from NDR.

Right now, companies that are willing to part with cash in arguably tough times are worth a second look. And while companies that pay dividends are great, the companies that increase those dividend payouts over time are even better.

Each week, we take a look at companies that are actively increasing their dividend payouts to shareholders. Without further ado, here's a look at this week's dividend stocks.

For $48 billion integrated pharmacy chain CVS Caremark (CVS), 2010 was a challenging year that ultimately lead investors to higher valuations after lingering in the red for much of the second and third quarters. Shares of the company gained approximately 8% in 2010, vs. 12.7% in the S&P. But the firm's constant dividend increases have helped lure investors to shares. With a 42.9% increase, CVS currently sports a 1.42% yield.

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