BALTIMORE ( Stockpickr) -- Dividend stocks haven't exactly grabbed the spotlight in 2013. With the broad market up around 26% since the calendar flipped over to January, momentum -- not staid dividend payouts -- has been the place to be as an investor this year.
But while most folks focus on capital gains, they're missing a truly big story in dividend stocks right now. Interest rates continue to be smashed to the ground; Fed taper or not, that's unlikely to change in the near-term. So, as I write, the spread between stock dividend yields and bonds is higher than it's ever been, which means that for income investors, stocks have never been more attractive. And with record cash on corporate balance sheets this year, those payouts just keep getting bigger.
Zoom out, and the numbers are even more impressive.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. 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. >>5 Big Trades for a Fed Taper 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. General Electric You can't find a more prototypical blue-chip stock than General Electric ( GE), so it's not hugely surprising that GE is having a stellar year in 2013. Where the broad market goes, GE goes too, and shares of the $272 billion conglomerate have climbed more than 28% year-to-date. But it's the firm's hefty 2.82% dividend yield that investors should be paying attention to from here. It looks well-positioned for a hike in the near-term.
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 Plus 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