BALTIMORE (Stockpickr) -- With the S&P 500 up more than 19% year-to-date, it's no surprise that investors are forgetting about dividend stocks this Fall. Sure, I get it. But if dividend payers aren't a key component of your portfolio, you're making a big mistake.
Value investors have been hand-wringing about the broad market for a while now. They're not seeing many bargains anymore. But dividend yields are a great counterpoint right now. As I write, the spread between treasury rates and dividend yields are as high as they've ever been - an indication that equities are sharing more cash with investors than ever before.
That's good for investors, and not just because it means you get a check each quarter.Over the last three and a half decades, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, based on data compiled by Ned Davis Research. The numbers are even more compelling when looking at companies that consistently increase their payouts. >>5 Big Trades to Take Right Now To take advantage of that trend today, we're focusing on dividend stocks that look ready to hike their payouts. So instead of chasing yield, we'll try to step in front of the next round of stock payout hikes. 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. Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter. McDonald's It may seem strange to start with McDonald's (MCD). After all, the Big Mac maker only just announced a dividend hike on Sept. 18 that brought the firm's quarterly payout to 81 cents per share. But Ronald McDonald's pockets are deeper than that, and MCD looks well positioned to announce another hike, especially in the face of potentially rising rates.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV