BALTIMORE ( Stockpickr) -- To be a good income investor, you've got to have a crystal ball.
In other words, you've got to find a way to step in front of dividend hikes before they happen, not after they've been priced into shares. That's usually easier said than done. But it's not impossible.
In fact, in the past few months we've had some stellar success in finding future dividend hikes just by zeroing in on a few key factors. This week, we'll do it again.
It's open season for dividend stocks right now. Fed Chairman Ben Bernanke has already said that interest rates are going to be nailed down near zero for the foreseeable future, and meanwhile, corporations are sitting on record profits and record cash holdings. That means that dividend stocks are income-seekers' only hope of generating decent yields right now -- and it means that U.S. companies have plenty of dry powder to fuel dividend hikes in 2012.>>5 Hated Stocks Set to Soar on Earnings And by picking out firms likely to see a dividend boost in the future, we can earn a bigger cost yield than the folks trying to chase yields right now. So, how do we spot potential increasers? For our purposes, that "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 this mid-2012 rally. Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.