Dividend Investors: 5 Stocks Poised to Hike Their Payouts

Stocks like McDonald’s Corporation (NYSE:MCD), The Coca-Cola Co. (NYSE:KO), and TransCanada Corporation (TSX:TRP)(NYSE:TRP) are poised to hike their dividends.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

For many, the biggest challenge when it comes to investing is fear of the unknown. Could the market implode? Could the economy crash? Could a company’s earnings miss expectations?

But there’s one aspect of investing you can hang your hat on: dividends. If you own a solid dividend-paying stock, you can be virtually certain you’ll be paid a regular stream of cash every quarter. For me, at least, seeing those cheques arrive in my brokerage account makes it easier to deal with the market’s inevitable ups and downs.

But some companies are so predictable, in fact, that it’s possible to know not only when the next payment will arrive, but also when the company will raise its dividend. So, with this theme in mind, I’ve put together a list of five companies that will likely hike their payouts over the next year.

1. Canadian National Railway Company

The Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is your ultimate forever stock. Built over a century ago, the firm’s network of track cuts right through densely populated cities from coast to coast. Even if you and I could scrape together a few billion bucks, there’s no way we could secure the right of ways needed to compete against this company. As a result, CN is a cash flow machine, raising its annual payout nearly 19-fold since going public in 1996.

2. TransCanada Corporation

Few companies are as specific about their dividend-growth plans as TransCanada Corporation (TSX:TRP)(NYSE:TRP). In November the pipeline giant said it expects to hike its payout by 8% to 10% annually going forward—in line with growth in earnings per share. With about $46 billion in planned expansion projects, there’s no shortage of growth ahead.

3. McDonald’s Corporation

McDonald’s Corporation (NYSE:MCD) knows how to share the wealth. Last year the golden arches returned US$6.2 billion to investors in combined dividends and share buybacks. And there’s more where that came from. According to analyst estimates compiled by Bloomberg, McDonald’s is expected to hike its dividend by about 5% this fall.

4. Brookfield Infrastructure Partners L.P.

Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP), as the name would imply, owns a hodgepodge of infrastructure assets all over the world. With $2.3 billion in cash and credit, the partnership is on the hunt for more acquisitions. Needless to say, that should translate into many more dividend hikes in the coming years.

5. The Coca-Cola Co.

Fearless prediction: The Coca-Cola Co. (NYSE:KO) will raise its dividend in March. How can I be so bold? Well, the soft drink giant has increased its payout every spring (and occasionally more often) for more than 50 years. Coke sales are booming in places like China, India, and much of the rest of the developing world. That ought to keep powering the dividend higher for years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Canadian National Railway Company is a recommendation of Stock Advisor Canada. Canadian National Railway Company is owned by Motley Fool Pro Canada.

More on Dividend Stocks

edit Person using calculator next to charts and graphs
Dividend Stocks

The 3 Best Dividend Stocks for Monthly Passive Income

These three dividend stocks are the best options for those seeking high passive income in the next few years in…

Read more »

clock time
Dividend Stocks

Got $10,000 to Invest? 1 Cheap TSX Stock to Buy Right Now

This top TSX dividend stock is finally on sale and has made some savvy buy-and-hold investors quite rich.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Want Monthly Passive Income? These TSX Dividend Stocks Are for You

If you want monthly passive income from TSX stocks, you have to do a little digging. I've given you a…

Read more »

ETF chart stocks
Dividend Stocks

3 International ETFs to Buy for a Diversified Portfolio

Some international markets may prove more resilient against economic downturns, and exposure to them may strengthen your portfolio during crashes…

Read more »

Payday ringed on a calendar
Dividend Stocks

TFSA Pension: 3 Canadian Dividend Stocks to Buy for Monthly Passive Income

These high-yield Canadian stocks look good to buy right now for a TFSA focused on monthly passive income.

Read more »

TIMER SAYING TIME FOR ACTION
Dividend Stocks

Need $500 Right Away? These 3 Passive-Income Stocks Have Got You Covered

I could really use an extra $500 to feed my kids, who seem to be permanently hungry. Couldn't you?

Read more »

Young adult woman walking up the stairs with sun sport background
Dividend Stocks

3 Top TSX Stocks to Begin Your Investment Journey

Given their solid business models and stable cash flows, these three TSX stocks are ideal for income-seeking investors.

Read more »

Community homes
Dividend Stocks

Housing Market Crash: How to Make a Profit 

The housing market crash is here, but you can still earn dividends with Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).

Read more »