While growth opportunities are becoming more hard-fought for typical blue chips like Colgate-Palmolive, one big expansion opportunity comes from emerging markets, where a burgeoning middle class population is looking to spend their newfound wealth on Western household brands.
Not all of CL's units are created equal -- the firm owns around 45% of the global oral care business, an operation that's Colgate's crown jewel, and a major inroad into international markets that have historically made up a smaller part of sales. Oral care boasts stickier customers (store brands aren't as easily interchangeable for brand names in this area), and it generates hefty margins. Combined with a bulletproof balance sheet and emphasis on dividend payouts, this stock looks like a strong dividend hike candidate right now.
Simon Property Group
Admittedly, mall REIT Simon Property Group (SPG) is a bit of a "gimme" when it comes to dividend hikes. The $50 billion real estate investment trust is effectively an income-generation machine -- it's legally obligated to pay out the vast majority of its income directly to shareholders in the form of dividends. That means that as long as SPG continues to see its profits grow, so too will its dividend. Management doesn't have discretion over its payout.Simon owns 245 million square feet of leasable space, a portfolio that makes the company the biggest real estate investment trust in the world. Because the firm's main properties are malls, it also gets a cut of tenant sales, a fact that gives this particular REIT considerable exposure to consumer spending. The landlord business is capital-intense; it's costly, after all, to build new mall projects. But even so, Simon has managed to maintain an attractive balance sheet with a manageable debt load. That should keep Simon's shareholder payouts on the rise in 2013. At last count, the firm's $1.15 dividend works out to a 2.88% yield. Capital One Financial Capital One Financial (COF) has made some transformative moves in the last few years. During the Great Recession, the firm bought banks with both hands, picking up enough assets to become the country's number-seven bank by deposits. Those huge deposits, in turn, provide a cheap source of funding for COF's legacy business: lending money.
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