Lately, investors have been rather prudent in making huge investments in stock. This is because many businesses have seen devastating aftereffects of the global recession. Amidst all this confusion, it will definitely hurt an investor's prospects of earning sizable gains if he knows little or nothing regarding the dynamics of the stock market. Therefore, it is definitely a better and safer option to invest in stocks that have been ranked highly by leading financial experts and stock market pundits. In my view, here are some of the stocks that are likely, or have already announced, to increase their dividend payout this year:
Cisco designs, manufactures, and trades in IP-based networking products and other communication-related products in the IT industry. It also offers a wide range of services related to these products. Cisco's diverse product range is specially designed to transport voice, data and video. Cisco impressed investors last year with an impressive performance in the last two quarters. It has finally managed to break away with a 38% increase in revenues after recording low trading for a succession of 52 weeks. On average, Cisco has had a cash flow of nearly $9 billion in the last three fiscal years. With outstanding shares in excess of 5 billion, free cash flow is recorded at about $2 per share with a free cash flow yield of about 9%. Cisco currently has a market capitalization of nearly $1.7 billion with an average trading volume of more than $45 million. It has recently announced plans to resell VMware View Virtual Desktop software to add enablement options and settings for Channel Partners. This will aid the business in widening its competitive moat considerably. Cisco's shares are currently trading at a price of around $20 per share after a 52-week range of $13 to $20. It has a decent price to earnings ratio of nearly 16 with earnings per share a little shy of $1.5. The company has traditionally enjoyed favorable investor sentiment as a result of a consistently good dividend history in recent years. This has allowed the company to maintain a dividend payout ratio of around 0.1 and a yield of almost 2%. Virgin Media has recently enabled flexible operations with the Cisco Quad Collaboration Software and this is expected to boost the company's prospects of growth over the remaining fiscal. In my opinion, Cisco is certainly a safe investment venture for 2012.
Occidental Petroleum (NYSE:OXY)
Occidental Petroleum is another huge oil exploration and production company that has shown an impressive performance in the start of 2012. Since the beginning of this year, shares have rallied by as much as 11%. To add to this, Occidental Petroleum declared a 17.4% hike in dividend which is likely to help it widen the rift between returns and breakeven. This hike has put Occidental's dividend payout ratio at a little over 50c per share. The company currently has a dividend yield of more than 2% and this has earned it favorable investor sentiment so far in 2012. Occidental has earnings per share of more than $8 with price to earnings ratio of nearly 13. The company currently has a market capitalization of more than $83 billion with an average trading volume of more than $4 million. Although renewed tensions in the Middle East have led to a rise in the international prices of oil and natural gas, the current year's balance sheet of Occidental has been flawless so far. I believe that the company will announce another hike in dividend yield soon.
United Parcel Services (NYSE:UPS)
United Parcel Services, more commonly known as UPS, is one of the stocks that have been of particular interest to the American business magnate Warren Buffett. United Parcel Services has the capacity to pay a pretty strong dividend. Recently this year, United Parcel Service announced plans to hike its dividend by nearly 10%. This new development is bound to attract favorable investor sentiment in the market and will bring the quarterly dividend payout ratio of the company close to 60c per share. United Parcel Services has also enjoyed a good dividend history with a 3% dividend yield this year. It has a total market capitalization exceeding $74 billion with an average trading volume of more than $4 million. The trading price of shares is currently around $77 although the last 52-weeks have seen it trade between $61 and $78. It has earnings per share of nearly $4 with a price to earnings ratio of more than 20. The recent announcement to hike dividend by nearly 10% is seen as a promising sign that is expected to widen the competitive moat of the thriving business. In my opinion, Universal Parcel Services is one of the safest and most lucrative investment ventures of 2012.
Wal-Mart has been the leading player in the global retail market for many years now. This global business has the largest number of employees working under one international brand and Wal-Mart is ranked as the largest public limited corporation in terms of revenue. Wal-Mart has traditionally enjoyed a long history of favorable investor sentiment and loyal investors. It has shown promising signs of upward movement over the years with a current trading price of about $61. The earnings per share of the company have grown at roughly 12% in the last 5 years with current earnings per share around $4.5 and price to earnings ratio is also impressive at around 14. Wal-Mart is a huge business with a market capitalization of nearly $211 billion. It has an average trading volume of nearly $9 million. It enjoys favorable investor sentiment with a long history of healthy dividend payouts. The current payout ratio floats around 0.5 against a dividend yield of almost 3%. Over the years, Wal-Mart has pushed for global expansion of operations and this has helped the giant business widen its competitive moat. According to my analysis of current financial indicators and prevailing market conditions, Wal-Mart is definitely among the safer investments for the current year.
3M is the leading manufacturer of a wide range of office equipments, industrial products and consumer items. Some of its more profitable products include Post-It Notes, Scotch Tapes, computer screen security devices and industrial adhesives. This diverse product range has helped 3M widen its competitive moat making it a more attractive investment than its peers. At the start of 2012, 3M had a 2.7% dividend payout. However, it has recently announced plans to increase the company's dividend by almost 10%. This will increase its dividend payout ratio to nearly 59c per share with a yield of almost 3 %. Share price is currently trading at around $88 with a price to earnings ratio of nearly 15 and earnings per share of more than $6. 3M is a huge investment with a market capitalization of almost $61 billion and average trading volume of more than $3.5 million. It has traditionally enjoyed favorable investor sentiment most of which has to do with consecutive hikes in payouts over the years. The company seems to have started the current year with a good run with booming business and rising revenues. 3M has also recently won a legal lawsuit which has awarded the company litigation fees and costs. It has also announced plans to invest in HydroNovation Inc and this is expected to widen the competitive moat of the business further allowing it to increase its payouts.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.