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5 Financial Stocks Ready for Bigger Dividends

BALTIMORE ( Stockpickr) -- In the past few years, financial stocks have been like poison for income investors. No other sector so brutally slashed at dividends when the financial crisis hit in 2008 -- and few have kept their payouts so low in the years since.

So why bother looking at them now?

To be fair, there were some extra factors pressuring dividend payouts. After the crash, banks' dividends became the business of the Treasury, which gets to regulate who can pay dividends and how much they can pay. And beyond bank holding company status, heightened capital requirements are another overhead pressure on dividend payouts.

>>7 Dividend Trap Stocks That Don't Pay Off

But not all financial sector stocks are created equal.

Forget about the pure-play banks for a second. Right now, there are a handful of financial stocks are getting ready to hike their dividend payouts to investors. Today, we'll take a look at five financial sector stocks that are likely to increase their dividends in the next quarter.

So how do we spot dividend increases in the future? 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.

>>ACTIVE STOCK TRADERS: Check out Stockpickr's special offer for Real Money, headlined by Jim Cramer, now!

Without further ado, here's a look at five financial sector stocks that could be about to increase their dividend payments in the next quarter.
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