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5 Dividend Stocks Ready to Pay You More

Stock quotes in this article: T, KMI, HRL, CPB, FCX 

BALTIMORE (Stockpickr) -- It's official: With Alcoa's (AA) third-quarter earnings release on Tuesday, the floodgates of earnings season are officially open.

And for dividend investors, that's a big deal. Typically, dividends and earnings season go hand-in-hand. It makes sense, after all, that firms want to announce their dividend payouts around the same time that they announce the earnings that are going to pay for them. This quarter, earnings could be particularly interesting.

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That's because it's the final earnings season of 2012. Investors are going to be watching stock fundamentals closely to see whether the numbers really justify the record bearish sentiment that's still lingering over Wall Street, or whether the numbers support the rally that's been heating up since June. Not surprisingly, then, earnings season can also have a big impact on stock prices when performance details and dividend payouts become public.

But there's a better way for income investors to build their dividend portfolios than just piling in after a big dividend hike.

That's exactly why we're scouring the stock market for a new group of big-name stocks that look ready to hike their dividend payouts in the coming quarter. In other words, these five firms are getting ready to boost dividends; they just don't know it yet.

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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 three, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about this late-2012 rally. The number of dividend hikes we've already been able to predict with this same approach speaks volumes about this approach.

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

 

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