Just in case you thought that stocks were getting back on track in February, yesterday's sharp correction in the S&P 500 provided a big reminder that it's important not to get too comfortable in this market environment.
All told, the last year has been a pretty rough time to be an investor: on a price basis, the big S&P 500 has lost about 5.75% over the last 12 months.
But while capital gains have been nonexistent, companies have been quietly ratcheting up their dividend payouts. Since this time last year, the total dividend payout in the S&P 500 is up 9.3%. And, unlike the rest of the market, the dividend-focused S&P 500 Dividend Aristocrats Index is actually up slightly in the last year.
Those are a pair of very good reasons to keep a closer eye on dividend payouts as markets continue to test investors' patience. Here's another: according to research from Morgan Stanley, dividends have contributed more than 41% of the stock market's total returns over the last eight decades. But, to find the biggest benefit from dividends, it's not enough to simply buy names with big payouts today -- you've got to think about which names are going to be paying more 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. And they've helped us grab onto dividend hikes with a high success rate in the past.
Without further ado, here's a look at four big stocks that could be about to increase their dividend payments in the next quarter. Think of it as your dividend preview.