| 3. Hasbro, Inc. (NASDAQ:HAS) |
 With the exception of 2008, when the dividend was held constant, this toy and games maker has boosted its annual dividend at least 20% in eight of the past nine years. That’s one of the strongest dividend growth track records in the S&P 500. It looks like the streak may end this year, with the dividend rising just 11% to $1.60. The dividend growth would likely have been stronger, were it not for the fact that Hasbro, Inc. (NASDAQ:HAS) is also buying back stock, with more than $50 million in share repurchases thus far this year. The current 3.4% dividend yield looks set for solid 10% annual increases in the years ahead, thanks in part to a current cost-cutting program that shake out some higher cash flow. |
| 4. Wells Fargo & Co (NYSE:WFC) |
 There’s a good reason why Warren Buffett has 20% of his firm’s entire investment portfolio tied up in this banking giant. Wells Fargo & Co (NYSE:WFC) sends him growing dividend checks every year. The payout stood at 20 cents a share in 2010, rose to 48 cents a share in 2011, 88 cents a share in 2012, and now stands at $1.20 a share, good for a 2.7% yield. The current payout is still just shy of the record $1.30 annual dividend paid back in 2007. But brace yourself for much higher payouts in the future. Consider that Wells Fargo & Co (NYSE:WFC) had never generated more than $24 billion in free cash flow in any year in its existence. But in 2012, that figure soared to $53 billion and is poised to rise higher still in 2013. Wells Fargo & Co (NYSE:WFC) awaits more clarity on possibly stiffenedcapital requirements for banks, but once that matter is resolved, look for this dividend to steadily work its way to the $2 a share mark. |
| 5. Baxter International Inc. (NYSE:BAX) |
 This health care equipment provider’s 7% dividend boost in 2011 must be seen as a disappointment. After all, the dividend rose by a 20% average annual clip in all other years going back to 2007. The 26% hike in the payout this year signals an ongoing commitment to dividend growth, meaning the current 2.7% dividend yield should steadily move higher in current years. |
- ENSCO PLC (NYSE:ESV)
- Analog Devices, Inc. (NASDAQ:ADI)
- Darden Restaurants, Inc. (NYSE:DRI)
- Horace Mann Educators Corporation (NYSE:HMN)
- Molex Incorporated (NASDAQ:MOLX)
Here’s a quick list of other solid dividend growers that have yet to report quarterly results. If history is any guide, their dividends may come in for more affection.
Risks to Consider: Some of these firms are boosting their dividends even faster than cash flow is growing, which is leading to rising payout ratios. As a result, dividend growth will eventually have to slow to the rate of cash flow growth.
Action to Take –> These companies aren’t making random annual decisions about their dividends. The dividend policy is part of a long-term plan to return ever-increasing amounts of cash flow to shareholders. If the U.S. economy strengthens in the next few years, as many economists expect, then these companies look set to keep returning more cash to shareholders.
P.S. — Looking for the best dividend-growing stocks in the market? We’ve put together a special list of companies that have beaten the market 7-to-1 in the past decade and raised dividends as much as 600%, yet they get overlooked by most investors.
The article Are These The Dividend Stars of Tomorrow? originally appeared on StreetAuthority and is written by David Sterman.
David Sterman does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.
