BALTIMORE ( Stockpickr) -- How's this for an income investing mantra: The only thing better than a big dividend payout is a bigger one.
The thing is, that's a harder goal to accomplish than it seems. Chasing yields, after all, will only get you so far; and all too often, big dividend payers have such big yields because investors are discounting the likelihood of a dividend rate cut.
But this week, we're not waiting for high-yielding firms to announce dividend hikes. Instead, we're focusing on the future, taking a look at five companies that are likely to boost their dividend payouts in the
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For our purposes, our "crystal ball" is composed of a few factors: namely a solid balance sheet, a low payout ratio and a history of dividend hikes. While those items don't guarantee dividend announcements in the next month or two, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about stock performance in 2012.
In other words, fundamentally solid companies realize that they need to hike returns for shareholders if they want to keep demand for their stock high. And historically, that sort of a dividend-centric strategy from management means much bigger returns for your portfolio:
Over the last 36 years,
have outperformed the rest of the
by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to data compiled by Ned Davis Research. The numbers are even more compelling when looking at companies that consistently increase their payouts.
Without further ado, here's a look at
five high-yield stocks
that could be about to increase their dividend payments in the next quarter.