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TheStreet Open House

5 High-Yield Stocks Ready to Boost Dividends Again

Stocks in this article: MSFTLMTPAYXCAGMWV

ConAgra Foods

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ConAgra Foods (CAG) pays out an identical yield to Paychex right now: 3.91%.

This week, the firm announced that it would be paying a fourth-straight 24-cent dividend on August 29. I suspect that it'll be CAG's last payout at the 24-cent level -- after all, the $10 billion food stock earns plenty of cash right now. ConAgra owns a portfolio of well-known food and kitchen product brands, such as Parkay, Healthy Choice, and Chef Boyardee -- and relying on those brands has been CAG's saving grace in this market.

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That's because cost inflation has been squeezing margins at most food processing firms. Because CAG has a strong portfolio of sticky brands to fall back on, it's able to pass more costs onto customers than they'd tolerate from a private-label competitor. When the dust settles, private label brands are likely to become a more important part of ConAgra's sales again.

MeadWestvaco

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Finally there's packaging supply firm MeadWestvaco (MWV). Even if you're not familiar with MeadWestvaco's product offerings, you've probably come in contact with them. The firm provides packaging solutions used for everything from cosmetics to cigarettes to food products. That consumer staple exposure is a big boon to the firm's sales, particularly now that it has unloaded its more economy-dependent office supply business from the corporate umbrella.

Emerging markets are a big growth area for MWV, where the firm already has significant exposure to Brazil (and has for more than 60 years) as well as a growing presence in India. As consumption increases at the hands of burgeoning middle-class populations in those countries, this packaging firm should benefit in a big way.

MWV currently pays out a 25-cent dividend, a payout that currently weighs in as a 3.42% yield. With ample cash generation capabilities and a manageable debt load, the way is paved for a dividend hike in the next quarter.

To see these dividend plays in action, check out the Dividend Stocks portfolio on Stockpickr.

And if you haven't already done so, join Stockpickr today to create your own dividend portfolio.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
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