BALTIMORE ( Stockpickr) -- When it comes to dividend stocks, bigger is generally better.Bigger dividend payouts and bigger companies mean two things: heftier income and more stable payouts. That's especially true right now, when market conditions are anything but favorable for folks who are trying to earn income from their portfolios. Right now, we're seeing a convergence of factors working against investors. For starters, retail investors are fleeing from equities en masse. In the last year, more than $170 billion has come out of equity mutual funds, instead making its way over to less risky (and less rewarding) bond funds at a time when interest rates are scraping against the bottom of historic lows. >>5 Stocks Set to Soar on Earnings And let me remind you that the companies that make up the S&P 500 have more cash than ever before, have higher profits than ever before, and pay a bigger dividend yield than they have in the last two decades. Clearly, something's off. So today, we're scouring the stock market for a new group of big-name stocks that look ready to hike their dividend payouts in the coming quarter. In other words, these five firms are getting ready to boost dividends; they just don't know it yet. In the past few months we've had some stellar success in finding future dividend hikes just by zeroing in on a few key factors. Now we'll look at our crystal ball and try to do it again. >>5 Dividend Stocks for the Next Decade 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, especially as investors start to get antsy about this mid-2012 rally. Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.
Eastman ChemicalIn the 90-plus years since George Eastman started Eastman Chemical ( EMN) to supply photo chemicals for his "main" business, Eastman has made some serious leaps and bounds over its sibling firm Eastman Kodak (EKDKQ). Today, Eastman Chemical is a major supplier of the chemicals used to make adhesives and coatings, as well as plastics and fibers. Its customers include everyone from automaker and construction firms to apparel manufacturers. Commodities are poison to a firm such as Eastman, and management knows it. While margins have been squeezed lately by higher input commodity costs, Eastman's size and specialization mean that the firm has been better able to pass those costs onto customers (eventually) than many of its peers can. And more importantly, the firm has unloaded any businesses that produce commoditized chemicals that are subject to stiffer competition. If Eastman doesn't have an edge in a business, it's not interested. Strong diversification (along with significant geographic diversification) is a big boon to EMN -- it means that the specialty chemicals that Eastman produces don't see sales as prone to the ebb and flow of a single industry. That, combined with a healthy balance sheet, sets the stage for a dividend hike in 2012. Currently, EMN pays out 26 cents each quarter to investors, a 1.9% yield at current price levels. To see these dividend plays in action, check out the at Dividend Stocks for the Week portfolio on Stockpickr. And if you haven't already done so, join Stockpickr today to create your own dividend portfolio. -- Written by Jonas Elmerraji in Baltimore.
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