BALTIMORE ( Stockpickr) -- The Fiscal Cliff is having a real impact on firms that want to maximize shareholder returns right now. That's showing through in dividend payouts this month.
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Just on Wednesday, for instance, wholesale club
announced a special $7 per share dividend payout for investors that prompted 6.3% rally in shares that day. Clearly, investors are rewarding companies that opt to give them cash ahead of the looming possibility of a tax hike on dividend income. Costco isn't alone, even if its $3 billion special dividend is the biggest of the bunch -- a handful of firms have announced special dividend payouts to reward investors before the cliff.
But even if you bought shares of Costco now to take advantage of your $7 payout, you've already missed out on the capital gains benefits from the announcement. That's why we're trying to step in front of the next set of dividend hikes this week.
In other words, these five firms are getting ready to boost dividends; they just don't know it yet.
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. Now we'll look at our crystal ball and try to do it again.
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 correction.
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Without further ado, here's a look at
five stocks that could be about to increase their dividend payments
in the next quarter.
First up is beverage giant
(KO - Get Report)
. While Coke is ubiquitous, it's hard to get a grasp on just how massive the company's reach really is; but think about this: Coke's products make up an astounding 3% of the 55 billion beverages served worldwide each day. Much of Coke's success is due to an amazing distribution network that spans more than 200 countries. The beverage business is cheap -- the fountain soda you drink at lunch has infinitesimally small ingredient costs. Transportation is less cheap, however. Coke's efficient network is key to the firm's massive net margins.