5 Dividend Stocks That Keep Investors Happy

Investors are pulling out all the stops to try to get more income from their portfolios. But with interest rates at historically low levels, it's hard to find that precious income just anywhere. Fortunately, there are still some investments that not only provide healthy payouts for investors, but also have the wherewithal to consistently increase those payments.

As traditional income-producing investments like bonds, bank CDs, and other fixed-income products have seen their yields tumble to never-before-seen lows, investors have had to turn to the stock market to get the income they need. As a result, dividend-paying stocks are more popular than ever. But just because a stock pays a dividend doesn't mean it's a good deal; even among dividend stocks, you'll find winners and losers.

So which dividend stocks are most likely to keep you happy? Personally, I like to see stocks consistently raise their dividends. And although some stocks have years-long streaks of increasing their payouts annually, today I want to look at dividend stocks that are tailor-made for impatient income investors.

Why wait?
Most U.S. dividend stocks make payouts quarterly. Typically, you'll see companies maintain the same payout rate for a year or so before making changes based on business conditions. That helps manage shareholders' expectations, and also provides some predictability to investors trying to predict their cash flow in the coming months. Even stocks with impressive records of dividend growth, including Procter & Gamble (NYSE: PG) and 3M (NYSE: MMM), tend to pay flat quarterly dividends four times in a row before making the next raise.

But a few companies have decided that investors can't have too much of a good thing. Rather than arbitrarily holding dividends constant, these companies have built a track record of raising payouts every quarter. Here are just a few of the candidates I found:

Source: Yahoo! Finance.

As you can see, many of the companies that raise their dividends consistently every quarter are energy stocks. In particular, you'll find plenty of master limited partnerships on the list -- stocks that have tax advantages associated with their dividends, so that typically not all of the money that shareholders you receive ends up counting as taxable income on your yearly return.

Just a gimmick?
But when you look at the distributions, you quickly see an obvious pattern: The regular increases tend to be extremely small. Often, you'll see distributions rise by just a fraction of a penny every quarter. With such a small impact, you might wonder whether it's really worth it to choose stocks with quarterly dividend increases over more traditional stocks that provide annual raises.

One thing is clear, though: You can't argue with performance. Because the energy sector has done well in recent years, you could try to dismiss the strong stock returns of the energy companies on the list above by citing business conditions across the sector. But the health-care services and microchip sectors have both also put together an impressive record of healthy returns for their shareholders, despite microchips' recent slowdown in sales. Certainly, stocks with the ability to increase dividends regularly need the profits to back their payments up -- at least in the long run. And once these streaks get long enough, they indicate a consistency in profitability that you should admire.

Get paid today
So as you look for the best dividend stocks, don't turn your back on companies that manage to reward their shareholders each and every quarter. If you don't like delayed gratification, they might be just the stocks you've been looking for.

If you like dividend stocks, you won't want to miss the Fool's free special report, "13 High-Yielding Stocks to Buy Today." Not all of them raise their payouts quarterly, but they all have traits that you'll like to see.