As every investor in dividend stocks should know, the key to getting a really big yield out of your dividend payers is to hang on to stocks with a history of raising their payouts.
Hold on long enough, and dividend stocks with paltry yields for new money will throw off fat yields on a long-time investor’s original cost basis.
The market is loaded with dividend stocks that make a habit of hiking their dividends every year. Some of these dividends stocks have track records that stretch back over decades. Some are set to declare a dividend increase any day now.
Dividend stocks are creatures of habit. When a stock has a history of annual dividend hikes, the board of directors typically declares the dividend increase at about the same time every year. Therefore, a company that has raised its dividend every year for five or 10 years in the second quarter is likely to do so again this year.
After checking out the dividend history of hundred of stocks, we’ve identified 20 big names — all members of the S&P 500 — that are likely to announce a dividend hike in the second quarter. Some declarations could come in a matter of days.
Since stocks can get a mild lift from the announcement of a dividend hike, it can pay to buy shares before the news hits. It also ensures you’ll be the official holder of the stock when the pay out is made.
Here are 20 stocks likely to hike their dividends in Q2:
Apple Inc. (AAPL)
Current Dividend: $1.88
Dividend Yield: 1.5%
Last Dividend Hike Ex-Date: May 2014
Apple Inc. (NASDAQ:AAPL) has hiked its dividend twice in its short history as a dividend payer, and both times the move came in Q2. Unlike last year, however, Apple isn’t under pressure from an activist investors to raise its payout, so this isn’t a sure thing.
Avery Dennison Corp (NYSE:AVY)
Current Dividend: $1.40
Dividend Yield: 2.7%
Last Dividend Hike Ex-Date: June 2014
Avery Dennison Corp (NYSE:AVY) has raised its dividend every year since 2009. However, as much as that’s rebuilding the payout, the dividend is still below where it was six years ago.
Baxter International Inc. (NYSE:BAX)
Current Dividend: $2.08
Dividend Yield: 3%
Last Dividend Hike Ex-Date: June 2014
Baxter International Inc. (NYSE:BAX) is riding a seven-year streak of dividend hikes and the next one looks like a good bet to be announced any day. BAX raised its dividend in Q2 the last two years in a row.
Cardinal Health Inc (NYSE:CAH)
Current Dividend: $1.36
Dividend Yield: 1.0%
Last Dividend Hike Ex-Date: June 2014
Cardinal Health Inc (NYSE:CAH) likes to declare its dividend in May with an ex-date in June, and this year should be no exception. After all, the company has hiked its dividend for 10 years running.
Colgate-Palmolive Company (NYSE:CL)
Current Dividend: $1.52
Dividend Yield: 2.2%
Last Dividend Hike Ex-Date: April 2014
If it’s springtime, it’s time for a dividend hike from Colgate-Palmolive Company (NYSE:CL). CL has paid a dividend since 1895, and delivered dividend growth every year since 1964.
Discover Financial Services (NYSE:DFS)
Current Dividend: 112 cents
Dividend Yield: 1.9%
Last Dividend Hike Ex-Date: May 2014
Discover Financial Services (NYSE:DFS) has raised its dividend annually for four consecutive years. Last year, the hike was declared in the second quarter.
Expeditors International of Washington (NASDAQ:EXPD)
Current Dividend: 64 cents
Dividend Yield: 1.40%
Last Dividend Hike Ex-Date: November 2014
Expeditors International of Washington (NASDAQ:EXPD) does things a little differently. It pays a semi-annual dividend with a hike coming in the second quarter year after year. Going by that schedule, the next increase is due to be declared next month.
FedEx Corporation (NYSE:FDX)
Current Dividend: 80 cents
Dividend Yield: 0.5%
Last Dividend Hike Ex-Date: July 2014 (declared in June)
FedEx Corporation (NYSE:FDX) doesn’t pay a very hefty dividend, but its been a reliable one for growth for the last half-decade. Typically, FDX declared a dividend hike in Q2 that is then paid in July.
Dividend Stocks Set to Hike: Hewlett-Packard Company (NYSE:HPQ)
Current Dividend: 72 cents
Dividend Yield: 1.9%
Last Dividend Hike Ex-Date: June 2014
Hewlett-Packard Company (NYSE:HPQ) only has a four-year history of uninterrupted dividend growth, but when it does hike its payout, it does so in the second quarter.
Dividend Stocks Set to Hike: Legg Mason Inc (NYSE:LM)
Current Dividend: 64 cents
Dividend Yield as of 4/16: 1.2%
Last Dividend Hike Ex-Date: June 2014
Legg Mason Inc (NYSE:LM) has a five-year track record of rising dividends. The yield may be pretty modest, but you can bet on a dividend hike a little later in Q2.
Invesco Ltd. (NYSE:IVZ)
Current Dividend: $1
Dividend Yield: 2.5%
Last Dividend Hike Ex-Date: June 2014
Invesco Ltd. (NYSE:IVZ) has raised its dividend in the second quarter every year since 2009. With market-beating stock performance for the past year, there’s no reason to expect IVZ to disappoint.
International Business Machines Corp. (NYSE:IBM)
Current Dividend: $4.40
Dividend Yield: 2.70%
Last Dividend Hike Ex-Date: May 2014
International Business Machines Corp. (NYSE:IBM) reliably ups its dividend every year in the spring. Indeed, it has done so every year since the turn of the new millennium. This years should offer more of the same.
Macy’s, Inc. (NYSE:M)
Current Dividend: $1.25
Dividend Yield: 1.9%
Last Dividend Hike Ex-Date: June 2014
Macy’s, Inc. (NYSE:M) has been hiking its dividend annually for only four years, but it typically does so in the second-quarter. Investors can expect the declaration to come next month.
NRG Energy Inc (NYSE:NRG)
Current Dividend: 58 cents
Dividend Yield: 2.2%
Last Dividend Hike Ex-Date: May 2014
NRG Energy Inc (NYSE:NRG) has only been paying dividends since 2012, but it has indeed raised its payout in the second quarter annually since then. Another hike should be announced soon.
National-Oilwell Varco, Inc. (NYSE:NOV)
Current Dividend: $1.84
Dividend Yield: 3.3%
Last Dividend Hike Ex-Date: June 2014
True, National-Oilwell Varco, Inc. (NYSE:NOV) is a mammoth in the oil and gas services business. That’s not a great place to be these days. But NOV has been aggressively raising its dividend the last few years, and it has the financial wherewithal to do so again.
PepsiCo, Inc. (NYSE:PEP)
Current Dividend: $2.81
Dividend Yield: 2.9%
Last Dividend Hike Ex-Date: June 2014
The second quarter is when PepsiCo, Inc. (NYSE:PEP) typically raises its payout. PEP has paid a rising dividend annually for 42 years and that streak won’t end soon.
Procter & Gamble Co (NYSE:PG)
Current Dividend: $2.57
Dividend Yield: 3.10%
Last Dividend Hike Ex-Date: May 2014
Like JNJ, Procter & Gamble Co (NYSE:PG) is a member of the Dow Jones Industrial Average that has raised its dividend in the second quarter annually for decades. Investors can expect another hike soon.
Southern Co (NYSE:SO)
Current Dividend: $2.10
Dividend Yield: 4.7%
Last Dividend Hike Ex-Date: May 2014
Electric utilities are among a dividend investor’s best friend, and Southern Co (NYSE:SO) helps show why. With a 13-year history of dividend growth, SO shareholders can expect another hike in Q2.
Travelers Companies Inc (NYSE:TRV)
Current Dividend: $2.20
Dividend Yield: 2.1%
Last Dividend Hike Ex-Date: June 2014
Travelers Companies Inc (NYSE:TRV) — a component of the Dow Jones Industrial Average — is due for one of its routine second-quarter dividend hikes. Recent history suggests it will amount to a raise of 4 cents to 5 cents per share.
Dividend Stocks Set to Hike: W W Grainger Inc (NYSE:GWW)
Current Dividend: $4.32
Dividend Yield: 1.8%
Last Dividend Hike Ex-Date: May 2014
W W Grainger Inc (NYSE:GWW) doesn’t have the biggest dividend yield on the block, but as a dividend hiker, it’s about as reliable as they get. GWW has raised its payout every year for 43 years, typically in Q2. The next one should be declared by month’s end.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
