Dividend stocks can be the foundation of a great retirement portfolio. Dividend payments not only put money in your pocket, which can help hedge against any downward moves in the stock market, but they're usually a sign of a financially sound company. Dividends also give investors a painless opportunity to reinvest in a stock, thus boosting future payouts and compounding gains over time. Yet not all income stocks live 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 within the following years.
Each of the results has fulfilled the following criteria:
- Double Digit EPS Growth For The Next Five Years
- Sales Growth Over 5% Over The Recent Half Decade
- Positive Dividend Payments
- Payout Ratio Below 30%
- Debt/Equity Under 0.2
These are the results...
