Dividend stocks have never been hotter. But while some investors look only at what a dividend stock is doing for them right now, those with more foresight pay just as much -- if not more -- attention to how much money the stocks they own will pay them in the years to come. Before I take a look at some of the most aggressively generous stocks with higher dividends this year, let's take a look at the mistake that some dividend investors are making right now.

Grabbing the bird in hand
Of course, it's always good to get a nice dividend payout right now. With interest rates near record lows, many investors have had a tough time making ends meet by drawing income from their investment portfolios. Until the Federal Reserve stops its game of chicken with inflation and begins the inevitable cycle of rising rates that typically accompanies an economic recovery, savers will have a hard time getting enough income from traditional sources like bonds and bank CDs.

With income-hungry investors in desperate straits, the popularity of the highest-yielding investments available has shot through the roof. But even though top-yielding stocks pay you a nice-sized check on a regular basis, they may not deliver the goods over the long haul.

For instance, hot on the heels of the end of the housing boom, mortgage REITs Chimera Investment (NYSE: CIM) and Annaly Capital (NYSE: NLY) still command dividend yields well into the double digits, giving you a solid return even when the shares don't go anywhere. But history suggests that when short-term rates start to rise back to normal levels, those dividend yields will start to fade -- and that may lead to an exodus among fast-money investors who lack the patience to withstand an adverse interest rate cycle for mortgage REITs.

Similarly, energy-related investments like master limited partnerships have also drawn a lot of attention. With high yields and some very nice tax benefits, Cheniere Energy Partners (AMEX: CQP), Buckeye Partners (NYSE: BPL), and other MLPs have not only made healthy payouts to their investors but have also rewarded them with capital appreciation as well. Look at their recent performance, though, and you'll realize that they may well be too hot -- especially if oil prices can't sustain their recent advance.

A whole nestful in the bush
Instead of reflexively grabbing stocks that will pay the top yields now, you should consider an alternative: stocks that are dedicated to growing their dividends steadily over time. As the economy has rebounded, companies have been a lot more comfortable loosening their purse strings and returning some of their plentiful cash back to shareholders in the form of dividends.

For instance, here are just a few of the companies that have pulled off double-digit percentage increases in their dividends just this year alone:


Recent Dividend Increase

Current Yield

Dow Chemical (NYSE: DOW) 67% 2.4%
Hewlett-Packard (NYSE: HPQ) 50% 0.8%
International Paper (NYSE: IP) 40% 3.4%
Wal-Mart 21% 2.7%

Source: Company releases, Yahoo! Finance.

Sure, these stocks don't have anything close to the dividend yields that mortgage REITs and MLPs offer. Hewlett-Packard, for instance, seems downright stingy by comparison. But having recognized the need to give their investors more income, these companies have demonstrated the commitment to higher dividends that shareholders are looking for in the current market environment.

Perhaps more importantly, these stocks are all well-known industry leaders with long histories of strong performance and competitive advantages. They aren't without risk -- Wal-Mart, for instance, recently admitted that spending patterns among its core customers suggest that high gasoline prices are emptying their wallets, leading to lower revenue later in each month. But investors can feel confident that having survived through ups and downs over decades, these companies will continue to find ways to sustain and grow their dividend payouts in the future -- regardless of what economic conditions may exist.

Give yourself a raise
Having some high-yielding investments in your dividend portfolio isn't a bad thing. But relying entirely on high-yield stocks could be a recipe for disaster. If you add some stalwart dividend stocks that have higher payouts in their future, you'll build yourself a much better defense against changing market conditions, and you'll be positioning yourself with a long-term strategy that will treat you well throughout your investing career.

If you'd like some other great dividend-stock ideas, take a look at 13 other high-yielding choices in The Motley Fool's latest special free report. To get instant access to the names of these 13 high yielders, simply click here -- it's free.

Fool contributor Dan Caplinger is a sucker for a good payout. He owns shares of Chimera Investment. Motley Fool Options has recommended a diagonal call position on Wal-Mart, which is a Motley Fool Inside Value, Motley Fool Global Gains, and Motley Fool Income Investor selection. The Fool owns shares of Annaly Capital Management, and Wal-Mart. 

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