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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Upcoming Spinoffs Could Pay Huge Dividends

Stocks in this article: ABT COP SLE

D.E. Master Blenders will trade on the New York Stock Exchange and be headquartered in Amsterdam. The business generated operating income (before corporate overhead) of $452 million last year, and analysts think the standalone business will easily produce more than $380 million of income this year.

D.E. Master Blenders and Sara Lee will pay dividends and have investment-grade credit ratings. Sara Lee has a 65-year track record of paying dividends, but recent dividend growth has been weak at just 1% a year.

Risks to consider: ConocoPhillips bases its income projections on "flat" gas prices and in the short-term will be partially funding the dividend from cash on hand and asset sales. This limits future flexibility and means a dip in oil prices could hurt the dividend. In addition, while both Sara Lee businesses will pay a dividend, the company hasn't disclosed initial rates, payout targets or dividend growth policy.

Action to take--> My top pick is ConocoPhillips because of the company's excellent dividend track record and transparent plan for future dividend growth. Abbott is also a strong choice for dividend investors who want a safe payout and steady growth. Sara Lee is appealing as a value play with modest income growth.

>>To see these stocks in action, visit the 3 Upcoming Spinoffs Could Pay Huge Dividends portfolio on Stockpickr.

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