Want to buy into a company that is likely to boost dividends in the near future? 

Five companies earned Reality Shares Advisors' most elite dividend health rating in October, joining a prestigious group that includes less than 10% of S&P 500 companies. McKesson (MCK) - Get Report , Leggett & Platt (LEG) - Get Report , Ametek (AME) - Get Report , Walgreens (WBA) - Get Report , and Southwest Air(LUV) - Get Report all achieved a DIVCON 5 rating, which indicates the companies most likely to increase their dividends within 12 months, according to our DIVCON methodology.


Source: Reality Shares Research

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Here are the year-to-date stock charts for each of the companies: 

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MCK

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LEG

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AME

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WBA

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LUV

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On the opposite end of the spectrum, Exelon fell to DIVCON 1, the lowest dividend health rating, which identifies those companies most likely to cut their dividends within 12 months according to the DIVCON methodology. Exelon joins eight other S&P 500 companies currently with the lowest dividend health rating: CONSOL Energy, Hudson City Bancorp, Freeport-McMoRan, Frontier Communications, FirstEnergy, Wynn Resorts, Newmont Mining and Marathon Oil.


Source: Reality Shares Research

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DIVCON is Reality Shares Advisors' dividend health rating system which assesses the likelihood that companies will grow or cut their dividends within 12 months. Like the U.S. Armed Forces' DEFCON system, DIVCON uses a five-tier rating system to provide snapshot of companies' dividend health, where DIVCON 5 indicates the highest probability for a dividend increase and DIVCON 1 the highest probability for a dividend cut. Companies' ratings are based on a weighted average of seven factors that research has found to be highly correlated to future dividend actions, including cash flow and earnings, buybacks, historic dividend trends, as well as consensus forecasts and external financial ratings.

Investors can see how the dividend health of their portfolios stacks up to the DIVCON methodology using

a free interactive feature

, which incorporates ratings for hundreds of companies. DIVCON scores are updated online quarterly, so changes since Sept. 30 won't be reflected until the end of the fourth quarter.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned. This article represents the opinion of Eric Ervin and may not represent the view of Reality Shares.