5 Stocks Getting Ready to Pay Bigger Dividends

BALTIMORE ( Stockpickr) -- Between renewed hopes for QE3 and the bond moves that the ECB is planning across the pond this week, central banks are hard at work holding interest rates below the level of inflation right now. For income-focused investors, that's a very bad thing.

The current environment has been difficult to traverse for income seekers. Low-risk fixed income investments just don't offer palatable returns anymore, as the piling-in of other investors spiked prices of treasuries and corporate debt, smashing yields to the floor. And if this past week's headlines are any indication, that low-rate/high-inflation scenario isn't changing anytime soon.

But there's a different story in dividend stocks.

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Many investors have summarily ignored equities for the better part of 2012, opting to avoid the volatility of the stock market and go with lower-risk options. But that outflow of capital from stocks has left stocks trading at a discount this year (earnings have outpaced price appreciation for the S&P 500 even from last year's arguably low valuations). But with a rally underway, those discounts aren't going to last long.

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.

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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.  

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