This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

4 Stocks Ready for Big Dividend Hikes in 2013

NEW YORK ( Stockpickr) -- Nearly half a decade after a deep recession, the U.S. economy may finally be poised for a sustained upturn. Economists are now looking for GDP growth in the second half of 2013 to approach 3% or even exceed that level.

A firming economy can have a profound impact on a company's capital allocation strategies. If the economy can finally gain altitude, companies will be increasingly willing to part with all of the cash that has been piling up on balance sheets.

>>5 Stocks Poised for Breakouts

Some of that cash will be spent on share buybacks and acquisitions, but a big chunk of the money will be earmarked for major dividend hikes. And it's pretty easy to spot the companies that are best-positioned for dividend increases: the firms that still maintain very low payout ratios. Companies that pay out less than 20% of their income can still manage to double their dividends and maintain a payout ratio in the reasonable 35% to 40% range.

Here are four stocks that are likely on the cusp of big dividend hikes.

>>5 Stocks With Big Insider Buying

Ford Motor

In the middle of the last decade, Ford Motor (F - Get Report) paid out 40 cents a share in annual dividends. That dividend was eventually eliminated to conserve cash, but thanks to a recent doubling in the quarterly dividend to 10 cents a share, Ford is right back to that 40 cents a share annualized payout.

And this automaker is just getting started. Ford is now so much more profitable than before, and its cash-rich balance sheet is so much stronger, that the dividend might double again from here. A hike to an 80 cents a share annual payout would equate to a 6.1% dividend yield.

Considering that Ford is now quite profitable -- and poised to become even more profitable in coming years as the European and U.S. economies improve -- management will become less fixated on maintaining absurdly high levels of cash. The company had $23 billion in gross cash at the end of 2011 and $27 billion at the end of 2012, and it should have $35 billion in cash by the end of 2014, according to Merrill Lynch.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
AAPL $95.18 1.64%
F $13.43 -1.40%
ITW $104.47 -0.48%
WLP $136.01 1.43%
FB $117.43 -0.96%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs