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.
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