Buy these stocks before their dividends go even higher


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Those of you who are regular readers of this site know how much I love talking about dividend stocks . I am firm believer in the power of dividends, especially when reinvested over time, but in order to really get the most out of a dividend-based portfolio, we need to find stocks that consistently raise their dividends.

When you combine a strategy of dividend reinvestment with a philosophy of focusing on stocks with a track record of dividend increases, the income you generate for your portfolio will quickly amplify over time.

There will obviously be times when a stock surprises Wall Street with an unexpected dividend increase, but more often than not, that is not the case. Stocks with a historical record of annual dividend increases tend to keep to the same schedule (for the most part) year after year, so if you know when a company has announced increases in the past, chances are good that future increases will come around the same time frame moving forward.

It is important to remember that just because a company raises its dividend one year, there is no guarantee that another increase will come the next year. In order to accurately guess which dividend increases are on the horizon, you need to combine both a past history of annual increases, with companies showing favorable dividend payout ratios. Payout ratios are important, because if they get too high, say 75 or greater, then the company's ability to sustain dividend growth comes into question.

Here are a handful of stocks that will most likely announce dividend increases over the next month.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Technology

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