3 Great Dividend Stocks Whose Payouts Could Double
For income-focused investors, finding stocks that offer solid dividend yields today is great, but finding ones that look well-positioned to grow their payouts substantially is even better. Such companies might not have the highest yields right now, but over time, they could become dividend stars in your portfolio.
If you're looking for stocks that could double their dividend payouts, there are three key characteristics to target:
For a company to double its dividend, it will need to generate cash flows well in excess of the current dividend payout. Otherwise, it simply won't have the resources to cut those larger checks to shareholders. Further, companies with high-growth opportunities usually aren't good candidates to radically increase their payouts. Instead, they tend to invest their cash into marketing, hiring new employees, developing new products, and building out corporate infrastructure. Therefore, the companies that are most likely to double their payouts will still be growing faster than the average dividend payer, but will also be nearing the end of their high-growth phase.
Source Fool.com
