With dividends accounting for one-third to half of total returns through time, investors love solid dividends. High dividends today are great, but companies that have demonstrated often that they have safe dividends that can be and will be raised repeatedly are where most seasoned dividend investors focus. With less than 45 days remaining until the start of 2016, the goal of 24/7 Wall St. is to identify those companies that are likely to announce dividend hikes between now and the end of 2015.

In an effort to keep this properly tuned to an investor mindset, 24/7 Wall St. has identified which companies would announce dividend hikes before year-end. Some of those actual payments might not be made until early in 2016, but an effort has been made to focus on a dividend history and predict how much the dividend can actually be raised, and we also have taken the dividend coverage a company has via adjusted earnings per share into consideration. Other considerations have been made as well.

It turns out that Dow Jones Industrial Average stocks just have a habit of lifting dividends. After all, they are Dow stocks for a reason. That pointed six big dividend hikes toward Boeing Co. (NYSE: BA) in aerospace and defense, Intel Corp. (NASDAQ: INTC) in processors and memory, 3M Co. (NYSE: MMM) in conglomerates, and Walt Disney Co. (NYSE: DIS) in media and entertainment. It also included the likes of former DJIA component AT&T Inc. (NYSE: T) and of MasterCard Inc. (NYSE: MA).

The dividend hike status of General Electric Co. (NYSE: GE) remains open, with a bias to a hike next year rather than this year. A dividend hike from CVS Health Corp. (NYSE: CVS) also seems likely, on a more moderate basis than in years past.

ALSO READ: 10 Brands That Will Disappear in 2016

Other consideration was given for companies versus peer dividends. After all, if a company’s dividend is far higher than peers, then it may have less pressure to raise its payouts in an overly aggressive fashion. After seeing fresh dividend hike news from the likes of Starbucks Corp. (NASDAQ: SBUX) and McDonald’s Corp. (NYSE: MCD), 24/7 Wall St. wanted to alert investors which large companies would be next on the dividend hike warpath before year’s end.

AT&T

AT&T Inc. (NYSE: T) is fresh off its DirecTV acquisition, and the opinion of 24/7 Wall St. long before the deal closed was that DirecTV actually would bring stronger dividend coverage. In October, the third-quarter earnings report noted that AT&T’s free cash flow dividend payout ratio was 57% year to date, improved from 67% in the second quarter. The company even increased its adjusted EPS and free cash flow outlook for the year to adjusted EPS in the $2.68 to $2.74 range and free cash flow in the $15 billion range or better. The corresponding dividend hike in prior years has been in mid-December, and 2014 was AT&T’s 31st straight annual hike, with a 2.2% payout hike.

Shares of AT&T were closed most recently at $33.26, with a consensus analyst price target of $36.96 and a 52-week trading range of $30.97 to $36.45. The company has a dividend yield of 5.8% and a market cap of $204 billion.

ALSO READ: Major Changes Seen in Warren Buffett’s Stock Holdings

Boeing

This aerospace and defense giant may be close to 10% off of its highs, but Boeing Co. (NYSE: BA) has a long runway full of income ahead of it. The maker of the 787 Dreamliner last hiked its dividend in mid-December 2014, with a $12 billion buyback, and the dividend went up by 25%. Due to a lack of real growth in earnings per share in 2015, we would expect a much more modest hike this time around, probably in the range of a 5% to 10% higher, so that Boeing is not running into a 50% payout ratio. Remember, Boeing wants to buy back shares too and had spent $6 billion on that alone in 2015 as of the third quarter. Boeing’s most recent backlog was listed as a whopping $485 billion, with nearly 5,700 commercial airplane orders.

Boeing shares were recently trading at $146.08. The stock has a consensus price target of $162.83 and a 52-week range of $115.14 to $158.83. The market cap is about $98 billion and the dividend yield about 2.5%.

Intel

The $0.96 annualized dividend Intel Corp. (NASDAQ: INTC) has been paying is just over 40% of its adjusted earnings. Intel is expected to announce a hike sometime around its Annual Investor Meeting on November 19, 2015. Intel should raise the payout, but it has pending merger and venture efforts and most of Intel’s cash is locked up overseas. Still, Intel was the best performing DJIA stock of 2014 and its shares are down in 2015. The processor and chip giant already yields about 2.9% and is up against $2.25 or so in normalized EPS ahead. It seems likely that Intel will raise its dividend to $1.00 per share on an annualized basis.

Shares of Intel were trading at $32.64, with a consensus price target of $34.95 and a 52-week range of $24.87 to $37.90. The dividend yield is 3.7%, and the market cap is $154 billion.

ALSO READ: 4 Safe Dividend Stocks to Own as Terrorism Escalates Volatility

3M

3M Co. (NYSE: MMM) was a good performer from 2012 through the end of 2014, but valuations got stretched and its payout ratio has risen to over 50%. The conglomerate last raised its dividend in mid-December 2014 with a 20% hike, but investors should look for a more modest hike ahead, unless 3M says it is ruling out any big cash acquisitions ahead. It just seems safe to expect that this is either the last big payout hike for a while, or 3M will moderate the growth in that payout ratio — the dividend was $0.635 in 2013 and is $1.025 now. 3M was strong enough that it raised its dividend during the recession and it has been a habitual dividend raising machine.

3M shares were recently at $157.03. The consensus price target is $160.08. The 52-week range is $134.00 to $170.50. 3M has a market cap of more than $96 billion and a dividend yield of 2.6%.

MasterCard

After rival credit card processing and clearing giant Visa announce a good dividend hike, MasterCard Inc. (NYSE: MA) almost has to do so as well, so a dividend hike may be seen in the coming weeks. MasterCard’s payout hike was by 45% in the December 2014 announcement, but the issue for both MasterCard and Visa is that they yield less than 1%. Visa’s dividend payout went up by 17%, and MasterCard only pays out about 20% of its adjusted income per share now. Is a 20% to 25% dividend hike fair to expect? Even doubling its dividend would be about a 1.3% yield.

MasterCard shares were last seen at $98.07. The nearly $111 billion market cap company has a dividend yield of 0.6%. The consensus price target is $111.61, and the 52-week range is $74.61 to $101.76.

ALSO READ: The 10 Most Profitable Companies in the World
Disney

This one would have been a guaranteed dividend hike in years past, but now we have to wait and see how Bob Iger handles this. Walt Disney Co. (NYSE: DIS) pays a dividend on a semi-annual basis rather than annually, and it already raised its payout by 15% in its June announcement that was paid at the end of July. Disney can afford a hike, but the reality is that there is a chance that Iger will tell us “We already gave you a hike!”

Star Wars and higher park tickets are helping growth here, even if cord-cutter fears are hurting ESPN. Last year brought a 34% payout hike, preceded by a hike of 15% and a prior 25% hike. Disney’s yield seems low at only 1.15%, but its shares performed so well in recent years that it is an artificially low yield after shares are massively higher, up 25% in 2015, but having tripled in the prior three years.

Walt Disney’s shares were trading at $116.13, with a consensus analyst price target of $119.29 and a 52-week trading range of $88.75 to $122.08. The dividend yield is 1.1%, and the market cap is $196 billion.

Runners Up

24/7 Wall St. has considered two other dividend front-runners: CVS Health Corp. (NYSE: CVS) and General Electric Co. (NYSE: GE). We also have included basic data on McDonald’s Corp. (NYSE: MCD) and in Starbucks Corp. (NASDAQ: SBUX) as their dividend hikes already have been announced.

ALSO READ: Oppenheimer Adds Top Triple-Play Stocks to Buy for the Rest of 2015

CVS Health Corp. (NYSE: CVS) last announced on December 16, 2014, that it would be even friendlier to shareholders. The pharmacy giant increased its common stock dividend by 27% at its annual analyst day meeting then. CVS has exponentially grown its dividend in the past five years, from under $0.10 to $0.35 most recently. That is about one-third of its normalized earnings on an adjusted basis, but we would expect a more normalized dividend hike rather than a large one here.

CVS shares were recently closed at $93.79, within a 52-week trading range of $81.37 to $113.65. The consensus price target is $117.00. The market cap is $104 billion, and CVS has a dividend yield of 1.5%.

General Electric Co. (NYSE: GE) remains a dividend wild card. If Jeff Immelt was understood properly in the most recent financial asset sales and buyback announcements, then we would not look for a GE dividend hike until next year. Still, GE’s spin-off of Synchrony has now been effected, and it very well may be the case can be made that this action and the buyback acted just like a dividend hike — but even better! GE’s stock price finally has gone back over $30, up from under $25 at the start of October. Either way, GE’s dividend hike remains in the wild card camp.

GE shares were last seen at $30.32. The market cap is roughly $306 billion, with a dividend yield of 3.0%. The consensus price target is $30.62, and the 52-week range is $19.37 to $30.90.

McDonald’s Corp. (NYSE: MCD) recently went out on a limb with above-expected dividend and share buyback growth. It is even borrowing money to do so, and the dividend is going up 5% to $0.89 per share per quarter. McDonald’s shares were trading at $110.94, with a consensus price target of $117.57 and a 52-week range of $87.50 to $114.99. The dividend yield is 3.2% and the market cap is almost $102 billion.

Starbucks Corp. (NASDAQ: SBUX) announced at the end of October that its board of directors approved a 25% increase in its quarterly dividend to $0.20 per share per quarter. Shares were recently changing hands at $60.55. Starbucks has a consensus price target of $67.78 and a 52-week range of $38.66 to $64.00. Its market cap is about $90 billion and its dividend yield is 1.3%.

ALSO READ: 10 Stocks to Own for the Next Decade

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.