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While it's not uncommon for companies to return value to shareholders through dividend distributions, not all dividends are equal. Some companies generate substantially more cash per share than they pay out, which could hint that a dividend increase is on deck for shareholders. After poring over income statements, it appears to me that Sun Hydraulics Corporation (NASDAQ:SNHY), U.S. Ecology (NASDAQ:ECOL), and Potash Corp (NYSE:POT) are attractive income stocks whose dividends could double -- at least. Here's why.

Niche market, efficient operations

Sun Hydraulics isn't a household name by any means, but it has reported a profit for 44 consecutive years and paid a dividend for 18 years. That doesn't mean the $800 million company is going to blow you away with growth, but the hydraulic system designer and manufacturer has a few favorable tailwinds behind it. Namely, that the current industrywide slump is showing signs of passing soon. The company could be in a great position to capitalize on the pending upswing with its latest high-performance products, which are finding increased traction in applications such as precision agriculture and wind turbines.

Returning to growth may be priority No. 1 for investors. That's especially true considering Sun Hydraulics has been stuck at roughly $200 million in annual revenue since 2011. Then again, there may not be that much to complain about. Thanks to consistent profits, capital-efficient operations, and a debt-free balance sheet, the company has grown its cash balance and shareholders' equity over 74% and 42%, respectively, during that time period.

Despite healthy growth in those balance sheet metrics, its quarterly dividend hasn't budged from $0.09 per share. Management does distribute a special profit-sharing payout to all employees and shareholders each year -- last year's equalled a quarterly payout -- but there's more room to run. In the last 12 months Sun Hydraulics has paid out just over 41% of its EPS in dividends, including the annual profit sharing payout. Doubling the quarterly dividend would only raise this ratio to 74% -- and that's assuming growth doesn't resume.

Post-acquisition dividend raise... eventually

The acquisition of The Environmental Quality Company, or EQ, in 2014 has allowed shareholders of environmental services company U.S. Ecology to bask in significantly higher revenue and income in the time since. Last year revenue soared to $563 million, an increase of 180% from 2013, the year before the acquisition. Operating income grew only 34%, but that's due to the lower-margin nature of EQ's business. Either way, investors have had little to complain about.

The company actually could increase its dividend today if it wanted. In the last 12 months, U.S. Ecology has paid out just 46% of its EPS in dividends. However, at the moment management is laser-focused on paying down the debt required to close the EQ deal. The good news is that those actions could enable a major increase to the dividend tomorrow. After all, reducing debt (and interest on the debt) will increase the amount of cash available to distribute. Then again, at that time, perhaps management will be on the lookout to make another acquisition.

Betting on a fertilizer recovery

Being one of the world's largest fertilizer producers has its perks, except when the entire industry is slumping. Potash Corp shareholders have discovered that the hard way, with shares down over 50% since the beginning of 2014. The historic rut has pressured the dividend stalwart to cut its quarterly dividend twice in 2016, first from $0.38 per share to $0.25 per share, then again to $0.10. But things have to turn around eventually, right?

Management seems to think so. That would be really good news for investors hoping the dividend payouts resume their traditionally gaudy stature. For instance, Potash Corp paid out 65% of EPS to shareholders in 2013 and 77% in 2014. Last year it paid out every penny. The problem is that EPS has dwindled from over $2 per share in 2013 to just $0.81 in the last 12 months -- with sharp decreases in each of the last two quarters. If the industry comes roaring back on the heels of rising fertilizer prices, then the company's shares won't be the only thing rising.

What does it mean for investors?

Income investors have a number of dividend strategies to choose from. They can invest in blue chip dividends to earn higher yields, growing dividends to realize the power of compound interest, or underappreciated dividends hoping for a bit of both. While there are numerous factors at play, investors may want to keep an eye on the three attractive income stocks mentioned above whose dividends could double.

Maxx Chatsko has no position in any stocks mentioned. Follow him on Twitter to keep up with developments in the engineered biology field.

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