3 Stocks That Could Hike Dividends In November

It's hard to believe, but the holiday season is right around the corner. And some of us will have just a little bit more to be thankful for this year than others.

Why? Because we're raking in more income. Plain and simple.

As many of you know, each month I update my readers on what companies I think are likely to announce a dividend hike in the coming month. I scan the market for noteworthy special distributions on the horizon, as well as for potential dividend hikes over the next four to six weeks. I give special attention to outsized double-digit increases and reliable dividend-payers that have been steadily growing payouts for a decade or more.

I flag these stocks first for readers of my premium newsletter, High-Yield Investing. Then, I share them with the public.

So without further delay, here are three potential dividend hikes I'm looking at right now...

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1. Mid America Apartment Communities (NYSE: MAA) – Mid-America owns and operates 305 apartment complexes containing more than 100,000 units. Most of them are in desirable markets from Florida to the Mid-Atlantic region. Particular emphasis is placed on cities with strong population growth and job creation such as Orlando, Nashville, and Washington, DC.

Mid-America has enjoyed steady occupancy, rising rental rates, and an expanding portfolio. This has given the company the financial fortitude to make 102 consecutive quarterly dividend payments over the past quarter-century. Over that time frame, distributions have more than tripled, from $0.26 per share to the current $0.96. That's contributed, in turn, to an annualized total return of 13.3%.

MAA just upped its revenue and earnings forecast for the remainder of 2019, citing strong apartment demand across most markets and the sharpest rental growth in two years. Management is expecting to finish the year with Adjusted Funds from Operations (AFF) of $5.64 per share. That'll likely pave the way for another dividend hike in the coming weeks.

At the current payout, the REIT yields about 2.8%. But with a strong investment-grade balance sheet, I am anticipating an increase to $1.00 per share, or $4.00 per share annually.

2. Abbott Labs (NYSE: ABT) – Abbott has a middling yield of 1.6%. But that's not because the healthcare company has been stingy with its distributions. In fact, this Dividend Aristocrat hasn't missed a payment since 1926. It's also raised them for the past 47 consecutive years.

A relentlessly rising share price has compressed the yield (not that shareholders mind). The stock marched to an all-time high near $90 a few months ago.

Thanks to heavy R&D investments, Abbott has built a sprawling portfolio. Its medical devices, diagnostic equipment, nutritional supplements, and other products generate $30 billion in yearly sales. After spinning off its pharmaceutical unit in 2013, dividends doubled over the next five years from $0.14 to $0.28 per share. And they continue to rise.

All four of Abbott's core divisions met or beat sales growth targets last quarter. Management just upped its already-optimistic 2019 earnings forecast to $3.24 per share, implying healthy double-digit growth. This innovator has a promising development pipeline and will likely continue to reward shareholders for years to come.

3. Sysco (NYSE: SYY) – Not to be confused with computer server giant Cisco, Sysco is the nation's largest wholesale food distributor. The company delivers food to restaurants, hospital cafeterias, and school lunchrooms across the country as well as internationally. It has approximately 650,000 customers.

This industry tends to be well insulated from economic downturns. In fact, it's nearly recession-proof – which may explain why SYY has been able to increase dividends for 50 straight years without interruption.

Through a combination of organic growth and acquisitions, Sysco has taken in $60 billion in revenue over the past 12 months. It also churned out a 13% increase in earnings to $3.55 per share. Returns on Invested Capital (RoIC) and free cash flow have also both improved meaningfully.

The latter surged by $250 million from the prior year, which bodes well for another dividend hike next month. A bump similar to last year would lift the annual payout to $1.68 per share.

Action To Take

Remember, just because these stocks are likely to increase dividends doesn't necessarily make them "buys." We won't be adding them to the High-Yield Investing portfolio right away without doing our own due diligence first, and neither should you.

That said, we'll be watching these names closely. In the meantime, if want to know about my absolute favorite high-yield picks, then I invite you to check out my latest report right here.

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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.

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