Many investors won't settle for anything less than the best they can get right this minute. However, if you're willing to wait, rather than taking the immediate payoff, you can often find great opportunities before anyone else has even heard of them. Dividend stocks offer just one example.

Good things come to those who wait
Most people want just one thing from a dividend stock: the biggest payout possible. Some investors -- especially those who got burned chasing former high-yielding financial stocks during the market meltdown -- might qualify that answer by arguing that they want the highest sustainable payouts they can find. Nevertheless, those investors want cash, quarter after quarter -- and for the most part, they don't want to wait to get it.

If you're completely dependent on the income you get from dividend stocks, that attitude makes perfect sense. In looking for investments that will generate much-needed cash from your portfolio, dividend investors are more focused on the here and now -- and on whether the stocks they own will remain stable enough to keep cranking out their dividend payments well into the future. If a stock doesn't have a good yield today, then it wouldn't meet their needs.

So even if I showed you some dividend-paying stocks that could rank among tomorrow's highest-yielding investments, many dividend investors wouldn't be interested -- at least, not yet. But if you want to make more money over the long run, you should be.

Finding big yields before they come
When it comes to picking dividend stocks, the current high-yielders are just too obvious. There's nothing easier than looking up whatever stocks have the highest yields at any particular moment. As a potential shareholder, therefore, you have absolutely no competitive edge over any other investor when it comes to buying shares of these companies. Essentially, you're investing with the herd.

Again, that's not necessarily a problem -- if you're comfortable with the dividend herd's results. To gain an edge, though, you have to look deeper at something that doesn't pop off the stock pages. In my opinion, that edge lies in dividend growth, especially among stocks whose yields are at least still on the low side.

Gains of the second order
Here's the theory: Before any dividend stock can arrive among the highest-yielding investments out there, it has to come up through the ranks. At some point, nearly every dividend stock started out paying a relatively small amount to shareholders. Yet time after time, you'll see how over the years, those modest dividends increase and eventually represent real money to investors.

That's why I decided to look for stocks that combine strong historical dividend growth with reasonable yet modest current dividend yields. I also looked for good stock performance -- because even under challenging economic circumstances, you'd expect the best stocks to be on the upswing. Here are some of the stocks I found:


Current Yield

Annualized Dividend Growth, Past 5 Years

5-Year Average Annual Return

Darden Restaurants (NYSE: DRI)




Williams Companies (NYSE: WMB)




Steel Dynamics (Nasdaq: STLD)




Fastenal (Nasdaq: FAST)




Tiffany (NYSE: TIF)








You'll notice that most of these stocks aren't well-known big-name blue chip companies. If you look closely, you'll find a few that match up with these companies -- Intel (Nasdaq: INTC) is perhaps the best example, with dividend growth of nearly 29% per year since 2005. But for the most part, companies with dividends that are rising quickly are small companies that aren't on the radar screens of most income investors. Or at least, they aren't yet.

Get there first
With yields around 2%, these stocks definitely aren't the highest-yielding stocks you can find. But they aren't dividend slackers, either, with yields close to the S&P's average of 1.8%.

More importantly, though, each of those companies has demonstrated a desire to share its success with its shareholders through higher dividends. With a solid track record behind them, you can expect each of these stocks to follow through on its promise, and eventually take its place among the investments offering the richest payouts. That's definitely something worth waiting for.

If income is what you crave, read on -- Fool contributor Anand Chokkavelu has one pretty darn compelling stock for you.