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These 4 Stocks Put More Money in Your Pocket

Lately, investors have been scooping up dividend stocks like there's no tomorrow. Fortunately for those starving for income due to low rates on interest-paying alternatives, more companies are boosting their payouts to shareholders -- and that trend doesn't look likely to end anytime soon.

But despite the good news from a wide variety of stocks, you still shouldn't settle for just any dividend stocks. Any company can manage to deliver a one-time dividend increase, but only stocks that build a track record of hefty hikes deserves your full attention.

Later in this article, I'll drill down on four stocks that are outpacing the market's dividend increases. But first, let's take a look at exactly how good a job the overall stock market is doing in showing shareholders the money.

Better dividends
For those looking for growing dividends, prospects look good for 2012. According to S&P senior index analyst Howard Silverblatt, the total value of dividend payments made by S&P 500 index component companies should jump by about 15% for the year.

You can point to several fundamental factors supporting higher dividends. Many companies have reversed long-standing records of not paying dividends to start making payouts, with the most notable perhaps being Apple (Nasdaq: AAPL  ) joining the dividend bandwagon earlier this month, finally letting loose its clamps on part of a cash hoard of close to $100 billion. Yet even as dividend payments have risen, corporate earnings have grown at a faster pace, leaving S&P 500 companies now paying an average of 30% of their earnings in dividends, well below the roughly half that they typically pay.

You can do better
A 15% jump in dividends may sound good. But some stocks have managed to do better. In looking through hundreds of stocks to find ones that could boast better than 15% growth in dividends both in the past year as well as annually since 2007, I found a number of familiar names.

Wal-Mart (NYSE: WMT  ) , 21% dividend increase in the past year, 17% average annual dividend increase since 2007:
Given the difficulties that the U.S. retail giant has gone through in recent years, it may be surprising to find the company on the list. But Wal-Mart has a long history of dividend growth through good times and bad, and even during its string of falling same-store sales and increased competition from deep-discounters as well as rival big-box retailers, Wal-Mart managed to raise its payouts. With a 9% increase just having come this quarter, don't expect more soon, but over time, Wal-Mart should reward income-seeking shareholders.

BHP Billiton (NYSE: BHP  ) , 21% one-year jump, 23% average since 2007:
BHP is just one of many mining companies that have discovered the value of dividends. With gold, copper, and other metals still trading at very high levels compared to 10 years ago, BHP and its peers suddenly have huge amounts of cash flow -- and BHP has boosted its payout 16 times since late 2002. Even allowing for the increased capital investment that high metals prices make feasible, dividend investors can expect the good times to keep rolling as long as commodities markets don't crash.

Union Pacific (NYSE: UNP  ) , 47% one-year jump, 26% average since 2007:
On a related note, when commodities are valuable, it pays to move them from place to place. That's exactly what Union Pacific has been doing, taking advantage of high energy costs to trumpet its fuel-efficiency advantage over trucking companies and other players in the transportation sector.

Accenture (NYSE: ACN  ) , 64% one-year jump, 31% average since 2007:
Most of Accenture's dividend pop came this year, with a sizable 50% increase coming last October. Yet for a company that didn't even pay a dividend until 2005, Accenture has done a good job getting that payout up to meaningful levels. With success in its main consulting business, there's no reason to think that those payouts couldn't keep growing in the future.

Don't settle for less
It's good news that the market overall is rediscovering the value of dividends. But by focusing on the companies that are most generous to their shareholders, you'll improve your chances of not missing out on this lucrative trend.

We've also got some other ideas for dividend investors, and you can find them in this free Motley Fool special report: "Secure Your Future With 9 Rock-Solid Dividend Stocks." Your copy is free, but it won't be available forever, so grab your free report today.

Fool contributor Dan Caplinger always likes money in his pocket. You can follow him on Twitter here. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of Wal-Mart and Apple. Motley Fool newsletter services have recommended buying shares of Wal-Mart, Accenture, and Apple, as well as creating a bull call spread position in Apple and a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy won't leave you hanging.

Read/Post Comments (8) | Recommend This Article (41)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 30, 2012, at 6:44 PM, Daveoffv wrote:

    When your article is on dividends, the first thing you should show is current yield.

  • Report this Comment On March 30, 2012, at 10:50 PM, DebsWi wrote:

    I would like to comment on Walmart. It may look good right now-but as someone who started with the company back in 1998-it has changed internally alot in the last 5 years. As I am no longer with WalMart, I will say here that I sold 2/3 of my holdings and bought other dividend stocks in January. Stock was a steadfast earner for me through the years and I had accumulated quite alot of shares thru payroll deduction. The company matched 15% up to $1800 p year and I took full advantage of that extra $324 worth of free stock each year and it paid off nicely when I sold it just under $60 a share. The average Joe on the street or some of you guys here don't have the "inside scoop" as to what's really going on. The company has continued to take away benefits and full time positions to the point now they're running stores with 20% less employees, and a higher % of part time employees. The average used to be 70% fulltime positions. They recently told all the older people who have greeted customers at the door or thank customers when leaving that they have to stock, put away returns, etc.-taken away the friendliness and gratitude at the door?? This is also part of the security in stores-open season for thieves to just walk right out with whatever they want! I would expect shrinkage to explode in some areas due to this factor alone. I held on to some of my stock, but I would be cautious in how much I keep in the future! Not buying at this time-just holding -and watching the new ones grow like crazy! Thanks for all your great advice!

  • Report this Comment On March 31, 2012, at 3:41 AM, Bombadil79 wrote:

    Interesting inside scoop Debs. I think Tesco in the UK is already suffering due to loss of in store quality. Perhaps Walmart made their money by sacrificing staff benefits and running on minimal staff? Maybe they will start feeling the competition and then we'll see a drop in revenue then dividends.

  • Report this Comment On March 31, 2012, at 8:24 AM, The1MAGE wrote:

    Looks like the discussion is turning to WalMart.

    Yeah they do have their issues, unfortunately. If they could get their proverbial heads out of their genuine a.... (okay, won't go there,) I do believe their profits would increase. But while they do have their issues that need serious attention, they are still making money, and I do not see that stopping.

    Many employees are quite annoyed at the company, and many lower, middle, and upper level managers in stores just suck bad.

    But I still see the customers coming in. They are still spending their money there. The income is still coming in.

    Now I do assume there are well run WalMarts around, and since I can't say I have even visited 5% of the stores in this country, there is no way I can discuss ever single store.

    But things like controlling the temperature of every store from a central location in Arkansas? It is decisions like this that make no sense, cost them good employees, and profits.

    But the reason they are not fixing these problems is that they are still making money. It will take a big drop in profits for them to actually look and see all the issues.

    I have no problem investing with WalMart right now, and expect the price, and dividend to keep rising.

    The issues are not enough to keep customers from shopping there, and there are currently enough employees that generally they can find replacements.

    If the company profits start to dry up, it isn't going to be an overnight event. Instead it will happen over years, possibly more then a decade.

    They have more then enough time to find and fix their problems, and the ability to at least push these problems off into the future.

    Personally until I see a dividend drop, then I am not worried about owning WalMart stock.

  • Report this Comment On March 31, 2012, at 10:59 AM, snickerdoodle9 wrote:

    I own shares of Wally World that make up a part of a diversified portfolio of blue chip/corporate bond companies . In spite of the changes that they have been and are experiencing , I believe that the dividend is and will remain safe . Accept for a few people who are anti Walmart shoppers , I have yet to see a lot of vacant stalls in their parking lots accept during Xmas and nighttime hours . I keep track of when and how much the divvy payouts are . So far they aren't failing me as a shareholder .

  • Report this Comment On March 31, 2012, at 5:35 PM, clay55 wrote:

    Hi I have a dividend stock account and currently have 112 different companies they all pay a dividend of over 5% the average is 8.8% .There track record,shows they have paid this high dividend for over 4 years, and most much longer. I thought if they were able to pay this dividend in the past financial crisis then they should be good now! It took me 3 years to find and develope this account it was not easy i could not find high paying dividend stocks anywhere even tried to GOOGLE it ! all I got was someone trying to sell me something TRY IT. It was working with companies like Montly Fool that helped!!! Yes some companies get in trouble and cut there dividend and so then I cut them but they are few and far between and when you live on dividends why settle for a company that has a great name like APPL but pays a 1.5% dividend !!!!!!!!!!!

  • Report this Comment On March 31, 2012, at 11:32 PM, Realexpectations wrote:

    I have been in probably 7 different walmarts over the past 5 years. We as a family do not go there for the reasons of the way they treat their employees and the store always feels dirty. We have been loyal to Target ever since for the opposite reasons of walmart. I seriously wouldn't be surprised to see that company out of business in 20 years or the balance sheet not nearly as good as it is.

    20 years ago you would be laughed at if you said apple would someday be the most valuable company in the world or GM would go bankrupt or ten years ago said rimm will probably be out of business in a matter of time.

    It seems to me that at the birth of great companies their ears are wide open and over time they get smaller ears or just put ear plugs in.

    This is the free market, adapt or die and the company shouldn't blame anyone but themselves.

  • Report this Comment On April 07, 2012, at 12:52 PM, jaybird43 wrote:

    The same thing happened at Sears in the late 70s. They went to ALL part-time employees to compete with K-mart. Soon, you could not find an employee to help you. That turned out well. How about that Sears?

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