Despite the fact that the Federal Reserve looks to be raising the fed funds rate either this month or in July, there is one inescapable fact. Interest rates are still at the lowest levels in more than 50 years, and even with an increase similar to last December’s, the rate still will be well under 1%. While that remains a plus for consumers and borrowers of all shapes and sizes, it has been a huge burden on income investors who look for safe and secure streams of interest or dividend income.

In a new and outstanding research piece, Jefferies combs through the market in search of companies that have rising payout ratios for the past three reported years, and that are expected to continue that trend over the next two fiscal years. We reviewed the list they presented, looking for the stocks that Jefferies has rated at Buy. We found four that look attractive now.

Kohl’s

This top retailer has been pounded and could be offering investors a solid entry point. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States. It offers private label, exclusive and national brand apparel, footwear, accessories, beauty and home products to children, men and women customers. The company also sells its products online at Kohls.com and through mobile devices. As of March 03, 2015, it operated 1,162 department stores in 49 states.

The company recently got a ton of free social media marketing and advertising when a Texas mom’s crazy internet post wearing a Chewbacca mask that she bought in a bargain bin at the store went incredibly viral. The clip has been seen by 135 million people as of Monday morning, making it the most watched video ever on Facebook. Kohl’s sent representatives to her house with a trove of gift cards and other items, and of course, more Chewbacca masks for the kids. Only 8.8% of funds own the stock.

Kohl’s shareholders are paid a huge 5.55% dividend. The Jefferies price target for the stock is $47, and the Thomson/First Call consensus price target is $41. The stock ended Tuesday’s trading at $36.04 a share.

HP

This is the printer and personal computer businesses of the old Hewlett-Packard. HP Inc. (NYSE: HPQ) provides products, technologies, software, solutions and services to individual consumers and small- and medium-sized businesses, as well as to the government, health and education sectors worldwide.

The company’s Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin client PCs, tablets, retail point-of-sale systems, calculators and other related accessories, software, support and services for the commercial and consumer markets.

The Printing segment provides consumer and commercial printer hardware, supplies, media, scanning device and software and services, as well as LaserJet and enterprise, inkjet and printing, graphics, and software and web services.

HP investors are paid a very solid 3.71% dividend. Jefferies has a $14.50 price target for the stock, and the consensus estimate is set at $13.87. The shares closed most recently at $13.38.
Regions Financial

This smaller banking play could do well this year as rates start to rise. Regions Financial Corp. (NYSE: RF) is a company that almost every Wall Street firm likes, but the stock has traded sideways to down since this time last year. The company is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, mortgage and insurance products and services. Regions serves customers in 16 states across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,630 banking offices and 2,000 ATMs.

One very positive area for the bank has been the overall growth in loans that came primarily from business lending, which was led by its commercial and industrial segments. Regions also has experienced especially strong growth in auto lending, which was driven by an expanded dealer network and more accepted loans per dealer. In the past, Jefferies has pointed to awful sentiment toward the stock due to bad communication from senior management, but trading at just under 10 times 2016 estimated earnings, the stock is a solid value play.

Regions Financial investors are paid a 2.64% dividend. The Jefferies target price is set at $9.50, and the consensus figure is at $9.92. Regions closed most recently at $9.83 per share.

Discover Financial Services

This top financial stock has very wide brand recognition. Discover Financial Services Inc. (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business.

The company also operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories.

Discover shareholders are paid a 1.97% dividend. The $60 Jefferies price target is less than the consensus target of $63.04 but higher than the $56.81 share price at Tuesday’s close.

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Remember, these are the companies growing their payout ratios, so they are not necessarily the highest yielding stocks. However, companies that can grow their payouts generally have solid free cash flow and remain good investments for more conservative accounts.

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