Looking to boost your income in 2015? Here are the five best dividend stocks to buy in January.
As an income investor, what’s a better way to ring in the New Year than a basket of dividend growers?
With the Fed still being vague on when it will finally raise interest rates, dividend stocks remain the most logical source of income for investors. And those companies that are consistently growing their dividends offer even more appeal.
So with the New Year upon us, let’s delve into some companies that offer attractive yields and have been growing their dividends steadily – and will continue to do so in the very near future.
Here are the five best dividend stocks to buy in January:
January Dividend Stock No. 1: Keurig Green Mountain (NASDAQ: GMCR)
The specialty-coffee company in Wyatt Investment Research’s backyard here in Vermont recently completed a name change. Now it’s changing the way it rewards investors.
A year ago, Keurig Green Mountain (still Green Mountain Coffee Roasters at the time) initiated a dividend for the first time in its history. This week comes another milestone: the company’s first dividend increase. GMCR is bumping its dividend 15%, from $0.25 to $02875. It will go ex-dividend tomorrow, Jan. 9.
At a mere 0.8%, the yield is quite modest. But perhaps this is Green Mountain’s second step toward become a reliable and appealing dividend grower.
January Dividend Stock No. 2: AbbVie (NYSE: ABBV)
Like Keurig Green Mountain, AbbVie is relatively new to the dividend game.
This pharmaceutical giant ($100 billion market cap) has only been paying a dividend for two years. But for the second straight year, the company is increasing that dividend. The latest increase is perhaps a sign that AbbVie is getting serious about rewarding shareholders.
AbbVie will increase its quarterly payout to $0.49 from $0.42, an increase of 16.7%. That bumps the yield to a very respectable 2.9%, and ups its payout ratio to 71%.
The ex-dividend date for the seven-cent increase is Jan. 13.
January Dividend Stock No. 3: Cracker Barrel Old Country Store (NASDAQ: CBRL)
This restaurant chain with gift stores and a Southern country theme specializes in comfort food. Its dividend gives shareholders a similar comfort.
Cracker Barrel pays $1 per share quarterly, good for a 2.9% yield. While its next payment does not entail an increase, investors should expect another dividend hike in the company months. Why? Because the company has increased its dividend every year since the recession. During that time, the payout has quintupled from $0.20. The latest increase came in July. It’s a good bet another increase is coming this July.
Until then, you can take comfort in the 2.9% yield and another $1-per-share payout this month. The company goes ex-dividend Jan. 14.
January Dividend Stock No. 4: Yum! Brands (NYSE: YUM)
Another restaurant (well, fast food) chain with a fairly generous dividend.
Yum! Brands, which presides over Taco Bell, KFC and Pizza Hut, offers a 2.3% yield that trumps the 1.9% yield of the average S&P 500 stock. And that dividend has grown every year since 2009. The most recent increase came in October, with the quarterly payout jumping to $0.41 from $0.37.
Another increase isn’t forthcoming this month. But with six straight years of dividend increases, you can expect another one later this year.
Yum! goes ex-dividend Jan. 14.
January Dividend Stock No. 5: Caterpillar (NYSE: CAT)
This construction giant offers the highest yield on our list at 3.2%.
Caterpillar’s earnings are growing steadily amid the U.S. construction recovery, and it is rewarding shareholders handsomely as a result. CAT’s dividend has nearly doubled since 2008, from $0.36 to $0.70. And the company has increased its payout every year since 2010.
With earnings per share expected to grow another 6% in 2015 and the company’s payout ratio at a manageable 40%, you can expect another increase from CAT in the coming months.
This month, Caterpillar goes ex-dividend Jan. 15.
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