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8 Best Dividend Stocks for 2015

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Dividends in Standard & Poor’s 500-stock index have been increasing at double-digit percentage rates in recent years, rewarding income-hungry investors. But that may be about to change. Data provider FactSet estimates payouts from S&P 500 stocks will increase by just 7.7% in 2015, as fewer companies initiate new dividends and many firms redirect cash to much-neglected capital spending.

So if you’re looking for big dividend gains, you’ll have to target a few sectors. Within the S&P 500, FactSet estimates, financial firms will raise dividends by an average of 13.2%, the most of any sector. Industrial companies come in second, expected to boost distributions by an average of 8.6%. Payouts from firms that make non-essential consumer goods are projected to climb by an average of 8.1%.

With that in mind, we’ve identified eight companies that are likely to deliver substantial dividend increases next year. All come from the three sectors mentioned above and all have payout ratios (dividends paid out as a percentage of earnings) of 50% or less, providing room for more hikes. To top it off, each firm has a history of raising distributions and a solid earnings outlook for 2015. Figures are as of November 24. The payout ratio is determined by dividing the current dividend rate by estimated 2015 earnings per share.

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