summer-2014Summer is fast approaching. That’s good news if you’re anyone who endured the polar vortex this winter. But it’s traditionally not-so-great news if you’re an investor.

Summers are Wall Street’s dog days – the height of the “Sell in May, Go Away” period, a.k.a. the market’s “worst six months.” Dating back to 1950, on average stocks have gained a mere 0.3% from May through October. On the contrary, the average gain from November through April is 7.5%.

While the theory doesn’t hold up every year, the numbers suggest that the “Sell In May” phenomenon is very real. To combat it, you would be wise to have at least a little bit of safety in your portfolio.

Dividend stocks make for good safety nets in volatile trading climates. Dividend growth stocks make for even better ones.

With that in mind, I’ve identified four dividend growers to help you weather the dog days of summer. Specifically, I’ve picked out four stocks set to increase their dividends in the coming months.

These are the four best dividend stocks to add to your portfolio in summer 2014.

Summer Dividend Stock #1: Cullen/Frost Bankers (NYSE: CFR)

One of the largest banks in Texas is also one of the financial sector’s most consistent dividend payers.

The $4.6 billion company has increased its dividend payout every year since the turn of the century. It’s the rare bank that didn’t cut its dividend during the recession.

Now Cullen/Frost is upping its payout yet again, increasing its 50-cent quarterly dividend by a penny on June 13 to shareholders of record by May 28. Even if you don’t get in on the stock by next week’s ex-dividend date, Cullen/Frost’s appeal to income investors is pretty evergreen. Not only does the company increase its dividend every year, but the yield is now a very respectable 2.8%.

Summer Dividend Stock #2: AMC Entertainment (NYSE: AMC)

This movie-theater chain is rolling out its first-ever dividend just in time for summer blockbuster season.

The company will debut a quarterly dividend to shareholders of record on June 6. At $0.20 per share, the dividend amounts to a very generous 3.8% yield.

AMC operates 343 movie theaters with a total of 4,590 screens, mostly in North America. Wang Jianlin, the second-richest man in China, bought the company for $2.6 billion last year, and took it public shortly thereafter. After a nine-year hiatus from public markets, AMC Entertainment raised $332 million in its December IPO.

The stock is already up 16% in the five months since it went public. Thanks in large part to Mr. Wang’s investment, the company’s earnings improved more than 600% in 2013. With far less debt on the books, AMC has now decided to start rewarding shareholders.

Summer Dividend Stock #3: PepsiCo (NYSE: PEP)

The second-biggest name in soda continues to be one of the most reliable dividend payers on the market.

PepsiCo is upping its dividend for the 42nd consecutive year. And the latest increase is quite substantial.

What was a 57-cent quarterly dividend will become a 66-cent payout to shareholders of record as of June 4. The 15% increase is PepsiCo’s largest on a percentage basis in seven years, and brings the company’s yield to an even 3%.

Summer Dividend Stock #4: Safeway (NYSE: SWY)

The second-largest supermarket chain in North America has been a steady dividend grower since initiating a payout in 2005.

Safeway’s dividend has quadrupled in that time. Its latest increase will bump the quarterly payout from 20 cents a share to 23 cents a share. It will be paid to shareholders of record as of June 19. At its current $34 share price, that brings Safeway’s yield to 2.7%.

Considering the stock has risen 58% in the last year and trades at a mere 2.5 times trailing earnings, there’s a lot to like about Safeway for income investors and value investors alike.

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Published by Wyatt Investment Research at