The Dividend Boom Is Far From Over For These 4 Stocks

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Apple Inc. (NASDAQ:AAPL) — I’ll admit it. I used to be a bona fide Apple bear. Then the stock price gave up $200 and the yield approached 3% — and I changed my mind.

Steve Jobs’ successor, Tim Cook, is no Steve Jobs. Cook has the vision to drive the company post-Jobs to its rightful place as a blue-chip stalwart. The Apple brand is downright iconic, and global market share should continue to grow, thanks to the company embracing the idea of more-affordable products. The dividend payout ratio has room to grow at 29%. Shares are priced at around $525 and yield 2.3%.

Cisco Systems, Inc. (NASDAQ:CSCO) — Sometimes looked on as a klutzy has-been that can’t seem to get out of its way, Cisco is a classic sleeper that offers investors loads of value. The longtime leader of technological connectivity has raised its dividend 21% this year alone. The company sits on a $50 billion cash pile, trades at about $23 a share with a forward price-to-earnings (P/E) ratio of 11, and has a dividend payout ratio of 33% and a dividend yield of 2.9%.

Genuine Parts Company (NYSE:GPC) — Genuine Parts has a solid reputation for prudent management and 57 years of consistent dividend increases. A leader in the U.S. after-market auto parts business, Genuine Parts is poised to glow globally. At 48%, the dividend payout ratio is a bit higher than the tech names. Shares are priced at $80.50 with a dividend yield of 2.8%.

Risks to Consider: Despite the steady history of these stocks, prices, like most of the market, may feel a bit overextended. A strategy using price targets may make sense. For example, look at the 52-week highs for the stocks you’re considering. If the current price of the stock is less than 5% from that high, you may want to consider an order that is right at 5% or better from the high.

Action to Take –> The blended dividend yield of the stocks discussed is roughly 2.7% and the average dividend payout ratio is 40%. That leaves room for that ratio to grow by 50% to the mature payout ratio of 60%. That would also translate into 50% dividend growth. Not a bad pay raise.

This article was originally written by Adam Fischbaum and posted on StreetAuthority.

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