This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Stocks Ready for Big Dividend Boosts

NEW YORK ( Stockpickr) -- The economic crisis of 2008 put a real scare into many companies. It was shocking to see business suddenly plunge, and the race began to make sure that enough cash was on hand in case it turned into an extended downturn.

As it turns out, the scariest moments were fairly short-lived, and many companies bounced back and quickly saw profits rise to fresh heights.

Still, many of these companies have taken a go-slow approach when it comes to dividend hikes. They've been authorizing modest increases in the dividend, but at a rate that is far slower than profits have been growing. As a result, the payout ratio (which is dividend payments divided by net income) remains extremely low for many companies. They are paying out 10%, 20% or 30% of their income in the form of dividends, but could easily afford payout ratios in the 40% to 50% range.

>>5 Stocks Setting Up to Break Out

History says they can do better. Wells Fargo calculates that companies in the S&P 500 paid out an average 53% of their profits in the form of dividends in the 30 years after World War II. That figure stands at 27% today. Back then the average dividend yield hovered in the 4% to 5% range. These days, we're talking 2.1%.

Software provider CA (CA) is a great example. Like other the technology companies, it never thought much about a dividend before, issuing a puny annual one of 16 cents. Well, it's just been super-sized to $1 a share (good for a 3.7% yield), and it could easily go to $1.50 a share in 2013 or 2014 and still represent a reasonable payout ratio.

Here's a look at five other companies that could be in for a huge dividend hike in coming years.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
NAFC $28.29 0.32%
ANDE $32.16 -4.50%
F $13.43 -1.40%
SMP $35.03 -0.99%
WU $19.83 -1.30%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs