BALTIMORE (Stockpickr) -- Want to outperform the broad market this year? Then it makes sense to focus on the biggest, most boring dividend payers on the market.
Dividend payers have been vastly outperforming nonpayers so far this year, and it's all thanks to a flight to yield that kicked on in earnest when the calendar flipped to March. That's not really a new phenomenon. Over the last three and a half decades, dividends stocks have outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, according to data compiled by Ned Davis Research.
But to find the biggest gains, it's not enough to simply buy names with big payouts today. You've got to think about what they'll be paying tomorrow too. 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, 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 to shareholders.
Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.