Don't look now, but some of Wall Street's biggest stocks look primed to announce dividend hikes in 2016.
As the big S&P 500 index teeters around 52-week lows in February, investors are getting a not-so-pleasant reminder about the importance of dividends. When markets turn sour, dividend payouts might just be your only source of returns. And while that's a little more obvious in markets like the one we're in right now, the fact is that over the long-term, dividends actually contribute almost half of all stock market performance.
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 five big stocks that could be about to increase their dividend payments in the next quarter. Think of it as your dividend preview.