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Image source: Pixabay.

Dividend stocks are often the foundation of a great retirement portfolio. Dividend payments not only put money in your pocket, which can help hedge against any downward move in the stock market, but they're usually a sign of a financially sound company. Dividend payments also give investors the opportunity to reinvest into more shares of stock, thus boosting future dividend payments and compounding gains over time.

Yet not all income stocks are living up to their full potential. Utilizing the payout ratio, or the percentage of profits a company returns in the form of a dividend to its shareholders, we can get a good bead on whether a company has room to increase its dividend. Ideally, we like to see healthy payout ratios between 50% and 75%. Here are three income stocks with payout ratios currently below 50% that could potentially double their dividends.

Chemed (NYSE:CHE)
We're kicking off this week with a company that is really odd -- Chemed -- in the sense that it operates two subsidiaries that don't have one iota to do with one another. Chemed owns VITAS, the nation's largest hospice care provider, and it also owns Roto-Rooter, the nation's largest commercial and residential plumbing business. The melding of the two might seem odd, but it's hard to argue against the results.

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Image source: Flickr user MyFuture.com.

In Chemed's latest quarter its consolidate revenue grew 7.8% to $386 million -- $285 million came from VITAS -- while its adjusted EPS galloped higher by 20%. VITAS witnessed a 3.1% increase in admissions, a 7.4% increase in revenue, and a 145 basis point expansion of its adjusted EBITDA margin. For its Roto-Rooter franchise, sales increase almost 9%, and adjusted EBITDA margin rose 98 basis points.

If business is so good, why is Chemed paying out only $0.96 annually in the form of a dividend? With its business reliant on VITAS, and VITAS sometimes at the mercy of Medicare billing, there's some wariness on Chemed's part about being too aggressive with dividend payouts, especially if there's any chance its reimbursements from Medicare could be reduced substantially in the future. But the numbers are on Chemed's side. Aging baby boomers, which are just now hitting retirement age, are likely to be a source of multi-decade growth for Chemed. So, even if Chemed's margins are tightened by Medicare, it'll have strength based on the sheer volume of hospice patients it's handling.

Looking down the road, Chemed is expected to see its EPS top $7.30 in 2016. Considering its reasonably low net debt position of $100 million, I'd consider a dividend double, or perhaps even triple, quite doable. I believe Chemed could be paying its shareholders between 1.5% and 2% annually.

RPM International (NYSE:RPM)
You'll note that one of the key components of this series on attractive income stocks is that there's no time limit as to when these dividends could double. RPM International, which manufactures coating, sealants, and building materials across the globe, is currently riding a 42-year streak of increasing its dividend, and that streak doesn't look to be in any jeopardy. However, its current payout of $1.10 annually could, in my opinion, be edged up to $2.20 annually over the next decade if its growth remains on track.

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Image source: RPM International.

"What keeps RPM from dramatically boosting its dividend payout?" you might be wondering? Keep in mind that RPM is a cyclical company that can find itself dependent on global growth and the pricing of certain commodities. As such, it needs to maintain a dividend that's sustainable during the inevitable economic downturns.

RPM International's latest quarterly report was far from its best, but that was primarily because adverse weather conditions and foreign currency exchange hurt its results. Once the unseasonably wet weather passes in the domestic markets, I would expect we'll see mid-single-digit organic growth in RPM's consumer segment. The U.S. jobs market is healthy and home prices are rising, which should give homeowners plenty of impetus to take on projects.

Global growth prospects also look modestly strong once currency fluctuations are removed from the equation. In constant dollars, sales in Brazil jumped 16% during the quarter, and the assumption would be that in the coming years as commodities begin to form a base we'll see a rebound in RPM's global construction business as well.

In the meantime, RPM International is projected to grow its full-year EPS to $2.81 by 2017 from a reported $2.38 in 2015. I suspect there's enough cushion in these growth estimates to support mid-to-upper single-digit percentage dividend growth in the coming years.

Whirlpool (NYSE:WHR)
Last, but not least, I'd suggest turning your attention to appliance juggernaut Whirlpool if you'd like a mix of income and growth.

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Image source: Whirlpool.

Like most in-home appliance companies, Whirlpool struggled with the global meltdown between 2007 and 2009. However, the company emerged from the recession stronger than ever. Whirlpool has been working tirelessly to cut its costs, improve its margins, bring new and innovative products to market that'll entice consumers to step up to higher margin appliances, and focus its efforts on faster growing emerging markets. All of these initiatives, along with some key acquisitions, appear to be paying off in a big way.

In the third quarter, Whirlpool announced that, sans currency effects, its revenue soared 25%, and its ongoing business operating profit hit a record $418 million, or 7.9% of sales. We can really see its scorching growth when we look overseas. Excluding currency impacts, Whirlpool Asia sales rose 127%, although this was aided partially by acquisitions. Whirlpool Europe, Middle East, and Africa also saw currency-excluded sales growth rise by 127% to $1.5 billion. Diversifying its business globally should help Whirlpool avoid the struggles it experienced during the Great Recession.

Buying Whirlpool also allows you to play the numbers game, much like what was described above with Chemed. A growing global population and rapid growth in emerging markets means the need for more housing. More housing, in turn, means the need for appliances. Despite holding in the neighborhood of 30% market share in the U.S., it's Asia and the Middle East that could be Whirlpool's greatest source of multi-decade growth.

Looking down the road, Whirlpool could be pushing for as much as $19 in EPS by 2018. Considering that it's only paying $3.60 per share annually in dividends, it's feasible that the next five-to-10 years could bring about a push to a $7.20 per share annual payout, if not higher. This is a name income investors aren't going to want to forget about.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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