Illinois Tool Works Inc. (ITW), Stanley Black & Decker, Inc. (SWK), Air Products & Chemicals, Inc. (APD): 5 Cheap Fast-Growing Dividends

Now for the reason many love the stock, its solid and consistent dividend growth. Wal-Mart Stores, Inc. (NYSE:WMT) has been great at returning value to shareholders, increasing the dividend every year since it first declared a dividend in 1974. Wal-Mart has paid dividends worth $5.4 billion in fiscal 2013, $5.0 billion in 2012 and $4.4 billion in 2011. In February of this year, the company upped its dividend with an 18% increase.

Heading into the second quarter, there were a total of 52 hedge funds bullish the stock, a 9% fall from the previous quarter. Worth noting is that Arrowstreet Capital sold off the largest position in the stock, worth an estimated $92 million (check out Arrowstreet’s portfolio).

Target Corporation (NYSE:TGT), after selling its credit-card arm, gets 98% of its revenue from retail. These include its large-format general merchandise and food stores in the U.S. and online. Much like Wal-Mart Stores, Inc. (NYSE:WMT), Target is superb at managing cash flow. During the fourth-quarter fiscal 2012, Target bought back about 10.4 million shares for $645 million, and paid dividends of $234 million. The company also recently hiked its annual dividend by 20% to $1.44, and expects it to increase to $3.00 per share or more by 2017.

Part of the big initiative for the stock is expansion into international markets, namely Canada and Latin America. Its eye has been on the Canadian market for a long time, and now Target Corporation (NYSE:TGT) plans to open 124 stores in fiscal 2013. Its other initiative is CityTarget stores. Target now plans to introduce a smaller store format of 60,000 to 100,000 square feet compared with the current format of 125,000 to 180,000 square feet. This will help the company tap urban markets, where real estate space is an issue.

Target Corporation (NYSE:TGT) saw top hedge fund owner by shares, Levin Capital Strategies, upping its stake to 1.8 million shares during the first quarter (check out Levin’s high yielders).

Bottom line

Dividends can be a big part of portfolios during low interest-rate environments and I have a special appreciation for dividend-paying stocks. But what makes these stocks even greater is the expectation that the dividend payments should continue to move higher and the realization of the stocks’ under-pricing will lead to higher stock prices. Both of the major retailers, Target Corporation (NYSE:TGT) and Wal-Mart Stores, Inc. (NYSE:WMT), should perform nicely on the back of a rebounding economy. As, well the rebounding economy and urbanization of developing markets will be key tailwinds for the industrial stocks.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Illinois Tool Works.

The article 5 Cheap Fast-Growing Dividends originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.