Dividend Investing: 5 Dividend Stocks Poised to Hike Their Payouts

Dividend InvestingDividend Stocks with Growth

Let me come clean. I don’t know where the Dow is going next. I gave up predicting the stock market’s next move years ago. But there is one thing I’m sure of: the following five dividend stocks will likely raise their payouts in early 2016.

How can I be so confident?

Well, they’ve been at it for years—some of them, for decades. Short of a depression, they’re not about to quit paying out their dividends anytime soon.

That’s why I love dividend investing—it’s predictable. Stomaching the stock market’s ups and downs is a lot easier when you receive a check each quarter. Earning a raise once a year is just icing on the cake.

Of course, no stock is a sure thing. Share prices, even those of top-notch firms, can be volatile. But all these companies have an established track record of dividend hikes that they would be hesitant to break.

Stock Yield Market Cap
International Business Machines Corp. 3.4% $147.6 billion
Procter & Gamble Co 3.2% $229.2 billion
Johnson & Johnson 2.8% $303.9 billion
Exxon Mobil Corporation 3.5% $342.2 billion
Apple Inc. 1.9% $615.4 billion

Data source: Google Finance

Let’s say a few words about these dividend stocks.

International Business Machines Corp. (NYSE:IBM) is a Warren Buffett favorite…and for good reason. The stock is a cash flow machine.

Management is content to milk the business, spinning off huge profits to shareholders. If you combine dividends and buybacks, IBM’s total yield tops 6.6%. Plus, another dividend hike is likely in April.

The story is straightforward at Procter & Gamble Co (NYSE:PG), too. It’s a consumer staples company serving millions of households worldwide. People visit the grocery store. You get a dividend—a dividend, by the way, that has been increased for 59 straight years.

If you want to own a sexy tech stock to impress friends at a cocktail party, then Johnson & Johnson (NYSE:JNJ) isn’t for you. But if you prefer good, old-fashioned dividends, then you’ll like this name just fine.

Like P&G, Johnson & Johnson is about as exciting as a mash potato sandwich. But what the stock lacks in flair, it more than makes up for in profits. The firm has hiked its payout for 53 straight years, earning tidy returns for shareholders. I suspect management will deliver another payout bump next month.

Refineries, pipelines, chemicals—Exxon Mobil Corporation (NYSE:XOM) is so much more than just an oil company. While the stock has been hard hit by low energy prices, Exxon has the scale needed to survive. Don’t expect management to end the company’s tradition of annual dividend hikes anytime soon.

Finally, here’s a name you don’t see often on a list of income stocks: Apple Inc. (NASDAQ:AAPL). Most people know this company for smartphones and tablets, not dividend checks. That might be about to change.

Apple is now raking in so much money that its management can’t spend it fast enough. Just to clear the cash off the balance sheet, CEO Tim Cook has now committed to annual dividend hikes. I suspect this company will soon become a favorite among income investors. (Source: “Apple Inc CEO Tim Cook commits to annual dividend hike,” Reuters, February 26, 2016.)