Stock Quotes in this Article: AAPL, FDX, INTC, MDT, XOM

BALTIMORE (Stockpickr) -- That’s one way to end a quarter! The S&P 500’s push to new all-time highs last Thursday marked the final trading session of the first quarter of 2013, a three-month span that’s seen the big index climb 10%. Now investors are left wondering what to expect for the second quarter.

The early indications point to more of the same.

>>5 Stocks Set to Soar on Bullish Earnings

From both a technical and fundamental perspective, this market has been making orderly moves in 2013. And while the 10% ascent in the S&P’s price is impressive, it’s only part of the returns that investors have been putting away this calendar year -- don’t forget about the dividends either. Dividends have contributed a material chunk of Mr. Market’s upside this year, and with interest rates scraping the bottom of the barrel, they’re more important than ever.

Over the course of this next quarter, it’s going to be crucial to keep looking ahead for the companies most likely to dish out dividend hikes. In the past few months we've had some stellar success in finding future dividend increases just by zeroing in on a few key factors. Now we'll look at our crystal ball and try to do it again.

>>5 Huge Stocks Ready to Rocket Higher

For our purposes, that "crystal ball" is composed of a few factors: namely a solid balance sheet, a low payout ratio and a history of dividend hikes. While those items don't guarantee dividend announcements in the next month or three, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about whether or not 2013’s rally will be able to hang on.

Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.

>>5 Big Stocks to Trade as S&P Tests Record Highs

Apple

Apple (AAPL) has a big problem -- a $137 billion problem, in fact. To be specific, that’s how much the $408 billion tech giant held in cash and investments on its balance sheet as of the most recent quarter. Normally, cash isn’t a problem for a company, but in Apple’s case, the firm’s cash is burdensome because management is having difficulty earning a meaningful return on that enormous war chest. That makes another dividend hike look inevitable right now, even if too many investors believe that Apple is doomed right now.

>>5 Stocks Poised for Breakouts

For those who don’t know, Apple is the company behind the wildly popular iPod, iPhone, iPad and Macintosh lines. The firm also operates the most profitable retail stores in the industry and the biggest music distributor in the world in iTunes. Investors have had a hard time separating Apple the company from Apple the stock -- but make no mistake, there’s a huge difference between the two.

In spite of Apple’s horrific share price trajectory, the firm’s fundamentals have continued to improve at an admirable pace. A single-digit P/E multiple and around 33% of the firm’s market capitalization covered by cash mean that AAPL’s valuation is teetering on the edge of lunacy in 2013. With few options other than to dish out cash in the form of share buybacks and dividends, investors should expect a hike for Apple’s $2.65 quarterly payout in the near term.

Exxon Mobil

Oil and gas supermajor Exxon Mobil (XOM) is another humongous name that’s looking primed for a dividend hike in 2013. Exxon currently ranks as the biggest energy company on earth, with reserves of more than 17.7 billion barrels of oil equivalent on its balance sheet at last count. The firm currently pays out a 57-cent quarterly dividend for a 2.5% yield.

>>5 Stocks Poised for Breakouts

Exxon is the prototypical oil and gas supermajor. The firm’s integrated operations mean that XOM is involved in everything from pulling crude out of the ground to refining it to selling gasoline at retail gas stations -- and while integrated operations do have dilutive effects on margins versus a straight E&P play, they do boost profits on an absolute level. With oil prices still sitting in the upper end of their historic price range, Exxon is enjoying high levels of profitability right now. The firm has historically done a good job of passing on that profitability to shareholders.

Exxon’s reserves have gotten skewed more heavily toward natural gas in recent years, a move that’s added some welcome -- if poorly timed -- diversification to the firm’s commodity exposure. Even though natgas prices have slid along historic lows for the last few years, XOM is well positioned long-term. Investors should keep an eye out for a dividend hike in short order.

Intel

Intel (INTC) is another massive name that’s looking well-positioned for a dividend hike. The $105 billion microchip maker has been under pressure from sellers over the last year, down more than 23% over the trailing 12 months. But while INTC’s share price has struggled, its dividend yield has been ratcheting higher and higher. Don’t be fooled by the generous 4.2% yield right now -- Intel still has room to move its 22.5-cent payout even higher in 2013.

>>5 Stocks With Major Insider Buying

I’ve made it no secret that I like Intel for income investors -- the stock made my list of 5 Must-Own Dividend Stocks for 2013 in March. A big part of Intel’s income prowess comes from how well it’s managed to dominate the chip business; the firm currently controls around 80% of the microprocessor market. So while PC makers have been falling all over themselves to find a better business than building computers, Intel has been eating their margins along the way.

To be sure, the semiconductor industry’s relative weakness in recent years has posed a big problem for Intel. Even if the firm’s fundamentals have remained attractive, share prices have dropped like rocks across the board. At this point, it looks like a case of overcorrection on the part of sellers, and now, with INTC consolidating, shares could be in store for a rally in 2013. Investors who want to lock in this stock’s hefty cost basis dividend yield should start buying here.

Medtronic

Medical device firm Medtronic (MDT) has managed to fare better lately; shares of the company have climbed 20% over the last year. Medtronic develops everything from pacemakers and defibrillators to stents and insulin pumps. Heart products have traditionally contributed around half of MDT’s sales, a solid positioning given the sheer number of people around the world who suffer from heart disease and related ailments.

Innovation has been a key to Medtronic’s success. The firm spends a considerable chunk of effort on R&D, and it’s managed to build out an attractive pipeline of medical device products through a combination of internal investment and tech acquisitions from other firms. While MDT’s offerings should help buoy shares in the near-term, looking longer-term, a rising tide is likely to lift all ships in the medical device business.

From a financial standpoint, Medtronic is in solid shape, with a reasonable amount of balance sheet leverage and plenty of liquidity to play with. Couple that with impressive free cash flow generation, and investors have a recipe for a dividend hike in the next quarter. Right now, MDT pays a 26-cent dividend that equates to a 2.2% yield at current price levels.

FedEx

Even though the past few years have been a rocky road for FedEx (FDX), the global shipping giant has been staging a quiet climb in performance recently. FedEx pioneered the express shipping business in the 1970s, and while the firm now shares a shipping duopoly with top rival UPS (UPS), FedEx still wears the crown in the express shipping segment. Unlike UPS, FedEx doesn’t mingle its express and ground shipping units, a fact that makes the two firms a bit less simple to compare.

Elevated shipping volumes have helped both shipping firms for the past couple of years, with FedEx finally returning to earning net margins in the mid-single-digits. But while the market has warmed for shippers, it doesn’t look much more competitive than it was just a few years ago. Huge barriers to entry and cautionary tales like DHL and the USPS make shipping look a whole lot less lucrative for newcomers than FedEx and UPS’ income statements would suggest.

FedEx is far from a dividend stock. In fact, the firm’s 0.57% dividend yield is by far the lowest payout on our list today. Even so, the firm is generating enough cash to offer up a dividend hike to its shareholders in the next quarter. That, in turn, could help buoy shares this spring.

To see these dividend plays in action, check out the at Dividend Stocks for the Week portfolio on Stockpickr. 



And if you haven't already done so, join Stockpickr today to create your own dividend portfolio. 



-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar
>>4 Reasons Not to Buy Stocks in 2013

>>5 Trades Getting Ready to Pop

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.