Stock Quotes in this Article: CAT, COH, DIS, LOW, TGT

BALTIMORE (Stockpickr) -- These five companies are primed to pay out more dividends next quarter -- they just don't know it yet.

Earnings season is grinding to a halt this quarter and investors are again starting to look for new catalysts that could be moving their portfolio positions. But even though corporate earnings are one of the biggest share price drivers, there’s been a bit of a disconnect this earnings season between earnings and the price of a company’s stock.

While it’s not completely clear when that disconnect will sort itself out, there is a way to bypass stock prices in the interim and get rewarded for corporate performance: I’m talking, of course, about dividends.

Investors have taken on a renewed interest in the last couple of years, after being unceremoniously reminded in 2007 and 2008 that those quarterly checks contribute a whole heck of a lot of Mr. Market's historical returns. According to research from Wharton Professor Jeremy Siegel, reinvested dividends account for 97% of total market performance. So it shouldn't be a big surprise that finding dividend increasers is a big priority.

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    Today, we'll look into the crystal ball to try and find firms likely to hike their payouts in the quarter ahead.

    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 two, they do dramatically increase the odds that management will hike their cash payouts, especially as investors start to get antsy about this 2012 rally.

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

    Walt Disney Co.

    Media giant Walt Disney Co. (DIS) is having a stellar 2012. Shares of the $80 billion company have rallied more than 20% so far this year and the box-office record set by The Avengers this month just adds icing onto that cake. But while thinking about Disney may conjure up images of Mickey Mouse, the firm’s real crown jewel is spelled ESPN.

    ESPN and Disney’s other cable networks contribute the lion’s share of the firm’s profits. ESPN in particular is impressive because it’s worked its way to become the most valuable cable channel on television, generating more fees from cable providers who want to carry it than any other network. Almost all of that success has come on the back of the NFL, which licenses Monday Night Football games to ESPN for some $1.8 billion each year. While that’s a massive mountain of cash to shell out for football broadcast rights, the strategy has worked well for Disney in the past.

    While Disney isn’t exactly a high-yield name, its annual dividend has grown significantly over the past several years. Now, as the firm continues to rake in cash, investors should expect a fourth consecutive dividend hike. Disney currently yields 1.33%.

    Caterpillar

    As the largest heavy equipment manufacturer in the world, Caterpillar (CAT) has major advantages over its peers in the $100 billion market for massive machines. The firm has a brand name that’s instantly recognizable as well as a dealer network that ensures both sales and maintenance are within easy reach of potential customers. That positioning also puts CAT in a solid stance to dominate emerging market demand for construction equipment, the biggest growth area in the industry right now.

    That’s not to say that CAT doesn’t face strong competition; it does. Other manufacturers, particularly those based in emerging markets, have done a good job of entrenching themselves, particularly in Asia, where Japanese and Chinese rivals compete for equipment dollars.

    Despite the black cloud of competition over CAT right now, the firm has still managed to dramatically increase its unit sales in the last two years and collect deep net margins for its trouble. A historically strong captive finance arm should help move backhoes and tractors in this low-rate environment.

    CAT has kept its quarterly dividend payout stagnant for a while now at 46 cents -- with plenty of cash on hand in the firm’s balance sheet, that could translate into a rate hike. Caterpillar currently yields 2%.

    Target

    Big box retailer Target (TGT) is no stranger to competition either. Retail is a business where how far you can push your margins matters -- and with the likes of Walmart (WMT) vying to grab business away, that’s no easy task.

    But Target has found considerable success in carving out a niche very separate from WMT’s. The firm was one of the first to team up with exclusive designers and market form over cost in a big box setting -- and it’s a strategy that’s paid off.

    Today, though, Target is setting its sights on a somewhat less exciting growth tool: grocery. Across the country, Target stores are getting revamped with new grocery options for shoppers, a move that isn’t intended as a growth engine in and of itself, but rather as a new way to drive traffic into stores. While the addition of grocery will dilute margins for TGT, it should translate into bigger absolute profits, a very good thing for investors.

    Those increased profits should also translate into bigger dividend payouts for shareholders. Target has kept its dividend at 30 cents per share for the past few quarters, but, financially, the firm is able to hike that payout right now. Expect the firm’s 2.2% yield to climb as a result.

    Lowe’s

    Lowe’s (LOW) is another retail name that looked primed for a dividend hike next quarter. As the second-largest home improvement retailer in the world, Lowe’s operates around 1,750 stores spread throughout the U.S., Canada, and Mexico. Now that investors finally realize that home improvement spending doesn’t ebb and flow with housing prices, Lowe’s is looking primed to take off.

    Lowe’s has enjoyed slow but steady top line growth over the last few years, the result of consumers’ willingness to spend on home improvement projects in place of spending on new homes. During the recession, the firm invested in better merchandising and increasing the presence of its store brands, two factors that have helped the company hang onto impressive margins for the retail industry.

    A 14-cent quarterly dividend currently means that Lowe’s yields 1.9% right now, but I would expect to see a dividend hike in the next quarter or two. Historically, Lowe’s has been another name that hasn’t gone more than a few quarters without pulling its payouts in line with its earnings. We’ll see if I’m right on May 21, when LOW announces its first-quarter earnings.

    Coach

    Last on the list is Coach (COH), the luxury handbag maker that’s seen its shares rally 13% so far in 2012. Coach was a superstar during the recession, when it managed to lower its price points and boost sales without diluting its brand. In doing so, the firm pioneered the “attainable luxury” model that rivals have been scrambling to recreate.

    With Coach’s sales in the U.S. looking mature, the company has turned its sights to emerging markets to find the double-digit growth that investors have become accustomed to. One of the biggest potential upsides comes from China, where Coach has invested in building company stores and building brand awareness.

    While the entry into the European market is another opportunity for Coach to spread its wings, economic headwinds and stiff competition in the luxury handbag space make it the less desirable market of the two.

    Since initiating its dividend in 2009, Coach has raised its payout to shareholders three times -- and now, with bigger profits and more cash on hand than ever, a fourth dividend hike is looking likely. Coach currently yields 1.3% -- investors should watch for an increase in that number next quarter.

    To see these dividend plays in action, check out the 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.

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

    Jonas Elmerraji, based out of Baltimore, is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.